There is no doubt about it a leasehold flat or house in Warfield is a wasting asset as a result of the shortening lease. If the residual term has, beyond 125 years remaining then this decrease may be of little impact however there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should consider extending without delay. Many flat owners in Warfield will qualify for this right; that being said a conveyancing solicitor should be able to advise if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally accepted that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 lawyers that we work with procure Warfield 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.
After protracted negotiations with the freeholder of her two bedroom flat in Warfield, Stephanie initiated the lease extension process just as her lease was nearing the critical 80-year mark. The legal work was finalised in May 2012. The freeholder’s fees were restricted to a tad over 500 pounds.
In 2010 we were contacted by Mr S King who, having was assigned a lease of a garden flat in Warfield in August 2012. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Comparable flats in Warfield with a long lease were worth £191,000. The average amount of ground rent was £65 invoiced annually. The lease came to a finish in 2084. Considering the 58 years left we estimated the premium to the freeholder for the lease extension to be between £23,800 and £27,400 not including legals.
Last year we were approach by Mr and Mrs. G Díaz , who acquired a garden flat in Warfield in February 2003. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year extension to my lease. Identical residencies in Warfield with a long lease were valued about £250,000. The average ground rent payable was £50 invoiced yearly. The lease terminated in 2095. Taking into account 69 years outstanding we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of legals.