Wellington leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Wellington enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Wellington you really ought to see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Wellington with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Wellington 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 lawyer we work with provide it.
Two years ago Ibrahim, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Wellington. Having bought his home two decades ago, the lease term was of little significance. Thankfully, he became aware that he would imminently be paying an escalated premium for Extending the lease. Ibrahim arranged for a lease extension at the eleventh hour in April. Ibrahim and the freeholder eventually settled on an amount of £6,000 . If the lease had gone lower than 80 years, the sum would have gone up by at least £850.
Last Christmas we were called by Mrs Charlotte Jones , who bought a one bedroom flat in Wellington in June 2009. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Similar premises in Wellington with a long lease were valued about £246,800. The average amount of ground rent was £60 collected quarterly. The lease came to a finish in 2075. Considering the 50 years left we calculated the compensation to the freeholder for the lease extension to be between £44,700 and £51,600 plus professional charges.
Last Christmas we were called by Mr Hunter Petit , who purchased a basement apartment in Wellington in November 1996. We are asked if we could estimate the price could be to extend the lease by 90 years. Identical homes in Wellington with an extended lease were in the region of £208,200. The average amount of ground rent was £65 invoiced monthly. The lease came to a finish on 18 March 2086. Considering the 61 years unexpired we approximated the premium to the landlord for the lease extension to be between £20,000 and £23,000 not including professional charges.