Unfortunately that a Whitehaven residential lease is a wasting 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 depreciation being disguised by increases in the Whitehaven property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay half 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 extra value that a lease extension will add the property Most leasehold owners in Whitehaven will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in Whitehaven with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with undertake Whitehaven 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 conveyancer we work with provide it.
Sebastian was the the leasehold proprietor of a 2 bedroom apartment in Whitehaven on the market with a lease of a few days over 59 years outstanding. Sebastian informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 annually. No ground rent would be payable on a lease extension were Sebastian to invoke his statutory right. Sebastian procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Summer we were approach by Mr and Mrs. E Davies , who purchased a one bedroom apartment in Whitehaven in January 1997. The dilemma was if we could approximate the price could be to extend the lease by an additional years. Comparative properties in Whitehaven with an extended lease were valued around £275,000. The mid-range amount of ground rent was £45 billed yearly. The lease elapsed on 2 August 2094. Considering the 69 years as a residual term we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 plus professional charges.
Mr and Mrs. C Bennett moved into a first floor apartment in Whitehaven in July 1999. The question was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Similar residencies in Whitehaven with an extended lease were worth £216,000. The mid-range amount of ground rent was £60 collected per annum. The lease ended in 2083. Having 58 years left we estimated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus legals.