Warfield Lease Extension - Free Consultation

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Top reasons for Warfield lease extension


Why you should start your Warfield lease extension today:

Increase your lease and increase your Warfield property value

With a domestic leasehold property in Warfield, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly once there are less than 80 years remaining. Leasehold owners in Warfield with a lease approaching 81 years left should seriously think of extending it as soon as possible. When the lease term has below eighty years remaining, under the relevant statute the freeholder is entitled to calculate and demand a greater premium, based on a technical calculation, known as “marriage value” which is payable.

Warfield property with a lease extension is almost the same value as a freehold

Leasehold premises in Warfield with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.

Lending institutions will not issue a mortgage on a short lease

The trend since over the last decade has been for lenders to tighten lending criteria generally - this has extended to the types of security over which the mortgage is to be charged. This has meant the minimum number of years remaining under the lease required by banks has increased. In the past mortgage companies would grant a mortgage on a lease with 25 years plus the term of the loan - typically fifty year leases but those requirements are being increasingly undermined by the requirement for lengthy leases - many now have a minimum term of 75 years as standard.

Lender Requirement
Godiva Mortgages 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.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
Santander You must report the unexpired lease term to us and await our instructions if:
1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or
2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or
3. no valuation report is provided
However, we will not accept a lease where on expiry of the mortgage:
(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or
(ii) less than 30 years remain and the loan is repaid on a capital and interest basis

We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder.
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
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges

For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

LEASE EXTENSIONS

We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office

Get in touch with one of our Warfield lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a freeholder in Warfield,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Warfield valuers.

Warfield Lease Extension Case Studies:

Rosie, Warfield, Berkshire,

Off the back of protracted correspondence with the freeholder of her basement apartment in Warfield, Rosie initiated the lease extension process as the eighty year mark was fast advancing. The legal work completed in July 2011. The freeholder’s fees were negotiated to less than six hundred GBP.

Warfield case:

Mr and Mrs. U Pérez moved into a recently refurbished apartment in Warfield in November 2000. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Comparative premises in Warfield with a long lease were valued about £176,200. The mid-range amount of ground rent was £65 invoiced per annum. The lease termination date was on 2 June 2080. Having 56 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 exclusive of expenses.

Warfield case:

Last Summer we were contacted by Mr and Mrs. S González , who took over the lease of a studio apartment in Warfield in March 1995. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by a further 90 years. Comparative homes in Warfield with a long lease were worth £242,600. The mid-range ground rent payable was £45 billed quarterly. The lease lapsed in 2091. Having 67 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £11,400 and £13,200 not including expenses.