Whitehaven leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Whitehaven tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Whitehaven you should 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 increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Whitehaven with over one hundred years unexpired on the lease are often 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 service charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Whitehaven,the lease extension solicitors 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 Whitehaven valuers.
Last October Evan, came very near to the eighty-year threshold with the lease on his purpose- built flat in Whitehaven. In buying his flat twenty years ago, the length of the lease was of no importance. Thankfully, he noticed he would soon be paying an escalated premium for a lease extension. Evan was able to extend his lease just ahead of time in July. Evan and the landlord who owned the flat above subsequently settled on sum of £5,000 . If the lease had dipped to less than eighty years, the sum would have gone up by at least £1,025.
In 2011 we were approached by Mrs V Martinez who, having owned a purpose-built flat in Whitehaven in July 2006. The question was if we could approximate the price could be to extend the lease by 90 years. Comparative properties in Whitehaven with 100 year plus lease were in the region of £257,800. The average ground rent payable was £65 collected every twelve months. The lease termination date was on 23 March 2091. Considering the 65 years remaining we calculated the premium to the landlord for the lease extension to be between £18,100 and £20,800 plus legals.
Mr and Mrs. S Mercier moved into a basement flat in Whitehaven in July 1996. The dilemma was if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Comparable premises in Whitehaven with an extended lease were in the region of £191,400. The average amount of ground rent was £55 collected quarterly. The lease expired in 2080. Taking into account 54 years left we approximated the premium to the freeholder to extend the lease to be between £34,200 and £39,600 plus costs.