The market value of Whitland leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the remaining term is below than 80 years
Leasehold properties in Whitland with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | 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. |
The conveyancers that we work with procure Whitland 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 conveyancing solicitor we work with provide it.
In the wake of eight months of unsuccessful negotiations with the landlord of her purpose-built flat in Whitland, Hollie started the lease extension process as the eighty year mark was fast nearing. The lease extension was finalised in March 2006. The freeholder’s fees were restricted to a tad over 650 GBP.
Last September we were called by Ms Hannah Jones , who acquired a studio flat in Whitland in September 2007. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Similar properties in Whitland with 100 year plus lease were valued around £285,000. The average ground rent payable was £45 invoiced yearly. The lease ended on 10 February 2096. Taking into account 71 years unexpired we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including professional charges.
Dr F Carter took over the lease of a ground floor apartment in Whitland in June 2009. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Whitland with 100 year plus lease were valued about £225,800. The average ground rent payable was £60 billed per annum. The lease came to a finish in 2085. Taking into account 60 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £23,800 and £27,400 exclusive of expenses.