Wallington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Wallington enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Wallington you must see if your lease has between seventy and ninety years left. There are good reasons why a Wallington leaseholder with a lease having around eighty years remaining should take action to make sure that a lease extension is effected without delay
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
The conveyancers that we work with handle Wallington lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Connor owned a 2 bedroom apartment in Wallington being marketed with a lease of fraction over 59 years outstanding. Connor on an informal basis spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Connor to invoke his statutory right. Connor obtained expert legal guidance and secured an acceptable deal informally and sell the flat.
Last Christmas we were called by Mr and Mrs. A Bennett , who owned a purpose-built flat in Wallington in January 1997. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Comparable premises in Wallington with 100 year plus lease were valued about £250,400. The mid-range ground rent payable was £65 billed per annum. The lease termination date was in 2089. Considering the 64 years unexpired we calculated the premium to the landlord to extend the lease to be within £19,000 and £22,000 plus professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Wallington premises is 21 & 23 Carshalton Grove in May 2009. the Tribunal adopted the figures presented as the premiums payable by the Applicant i.e. a total of £20,750. This case related to 2 flats. The unexpired term was 72 years.