Winchelsea leases on domestic deteriorating in value. if your lease has about ninety years unexpired, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then have to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Winchelsea will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In some cases you may not qualify. There are prescribed deadlines and procedures to comply with once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
Leasehold properties in Winchelsea with more than one hundred years unexpired on the lease are often regarded as a ‘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 upside in purchasing the reversionary interest unless savings on ground rent and service charges merit 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; |
| 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. |
| 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. |
The conveyancers that we work with procure Winchelsea 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.
Last October Kai, started to get close to the 80-year threshold with the lease on his basement flat in Winchelsea. In buying his home twenty years ago, the lease term was of minimal bearing. Luckily, he noticed he would imminently be paying an escalated premium for Extending the lease. Kai extended the lease just under the wire last March. Kai and the freeholder ultimately settled on a premium of £6,000 . If the lease had fallen to less than eighty years, the figure would have become more exhorbitant by a minimum £875.
Mrs F Wood moved into a studio flat in Winchelsea in October 1996. The question was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable homes in Winchelsea with a long lease were in the region of £205,000. The average amount of ground rent was £50 collected annually. The lease concluded in 2103. Considering the 79 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus legals.
Last Spring we were called by Dr Chloe Morgan , who completed a ground floor flat in Winchelsea in November 2004. We are asked if we could approximate the price would be for a ninety year lease extension. Comparative flats in Winchelsea with 100 year plus lease were worth £275,000. The mid-range amount of ground rent was £65 invoiced monthly. The lease terminated on 9 April 2092. Having 68 years unexpired we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of fees.