Welton leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Welton tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Welton you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you better control over the value of your Welton leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas James, started to get near to the 80-year mark with the lease on his two bedroom apartment in Welton. In buying his home two decades ago, the lease term was of little bearing. Luckily, he noticed he would imminently be paying an inflated amount for a lease extension. James was able to extend his lease at the eleventh hour last August. James and the freeholder eventually agreed on sum of £6,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £1,025.
In 2014 we were called by Mrs Katie Moreau who, having purchased a basement flat in Welton in March 1999. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Similar residencies in Welton with 100 year plus lease were worth £245,000. The average amount of ground rent was £50 invoiced per annum. The lease terminated on 16 October 2092. Given that there were 68 years unexpired we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.
Last year we were approach by Mr and Mrs. V Evans , who acquired a one bedroom flat in Welton in May 1995. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Similar premises in Welton with 100 year plus lease were valued about £285,000. The mid-range ground rent payable was £55 collected every twelve months. The lease ended in 2103. Taking into account 79 years left we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus professional charges.