The value of Wilmslow leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the unexpired lease term is below than eighty years
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Lloyds TSB Scotland | 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you increased control over the value of your Wilmslow leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Finley, started to get near to the 80-year mark with the lease on his ground floor apartment in Wilmslow. Having purchased his property two decades ago, the lease term was of no significance. Thankfully, he became aware that he would soon be paying an inflated amount for a lease extension. Finley extended the lease just ahead of time in August. Finley and the landlord who owned the flat above eventually agreed on an amount of £5,500 . If he failed to meet the deadline, the price would have become more costly by at least £1,025.
Last Autumn we were called by Mr and Mrs. U Rivera , who purchased a one bedroom apartment in Wilmslow in October 2006. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical homes in Wilmslow with an extended lease were worth £264,000. The mid-range ground rent payable was £60 billed every twelve months. The lease terminated in 2078. Taking into account 53 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £37,100 and £42,800 plus expenses.
In 2011 we were called by Mr and Mrs. J Patel who, having bought a one bedroom apartment in Wilmslow in March 2004. The question was if we could approximate the premium could be to extend the lease by ninety years. Comparable properties in Wilmslow with an extended lease were valued around £225,400. The average ground rent payable was £45 billed quarterly. The lease elapsed in 2089. Given that there were 64 years left we calculated the compensation to the freeholder to extend the lease to be within £15,200 and £17,600 exclusive of fees.