The re-sale value of a leasehold property in Wimbledon depends on how many years the lease has left to run. If it is close to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of buying. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that all matters can be addressed in advance of the 80 year mark. Leasehold Reform legislation entitles Wimbledon qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Wimbledon with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘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 |
|---|---|
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Wimbledon 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.
Trailing protracted negotiations with the landlord of her first floor flat in Wimbledon, Ellie commenced the lease extension process just as her lease was coming close to the all-important 80-year threshold. The transaction was concluded in January 2014. The freeholder’s fees were kept to an absolute minimum.
Last Spring we were called by Ms Niamh Torres , who owned a studio apartment in Wimbledon in August 1995. The question was if we could estimate the price would be to prolong the lease by an additional years. Comparable properties in Wimbledon with 100 year plus lease were valued around £280,000. The average amount of ground rent was £45 billed yearly. The lease elapsed in 2095. Having 70 years left we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus expenses.
An example of a Freehold Enfranchisement case for a Wimbledon residence is 629 Garratt Lane in September 2014. The consideration payable for the acquisition of the freehold of the subject property was the sum £21,302.74. This represented a valuation of the freehold in the sum of £23,864 from which the sum of £2561.27 has been deducted in respect of certain costs in repairing and insuring the premises This case was in relation to 3 flats. The unexpired residue of the current lease was 72.94 years.