Unfortunately that a Whitchurch residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Whitchurch property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term slips below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Whitchurch will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Halifax | 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 |
The conveyancers that we work with procure Whitchurch 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.
Last October Theo, started to get near to the 80-year mark with the lease on his ground floor apartment in Whitchurch. In buying his property two decades ago, the unexpired term was of no importance. Fortunately, he became aware that he needed to take steps soon on Extending the lease. Theo was able to extend his lease at the eleventh hour last September. Theo and the landlord who owned the flat above subsequently agreed on sum of £5,500 . If the lease had slipped below eighty years, the figure would have become more exhorbitant by at least £1,075.
In 2013 we were phoned by Ms W Garcia who, having was assigned a lease of a one bedroom flat in Whitchurch in June 1997. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative properties in Whitchurch with an extended lease were valued around £255,000. The mid-range ground rent payable was £50 invoiced monthly. The lease concluded on 19 September 2096. Taking into account 70 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
Ms Rebecca Leroy was assigned a lease of a studio flat in Whitchurch in June 2002. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable premises in Whitchurch with an extended lease were valued around £246,800. The average ground rent payable was £60 billed yearly. The lease finished in 2076. Given that there were 50 years unexpired we calculated the premium to the landlord to extend the lease to be between £44,700 and £51,600 not including costs.