As the the remaining lease term of a Winchelsea residential lease decreases so does its value and therefore the value of your property. If the lease has, more than one hundred years remaining then this decrease may be of little impact however there will become a point in time when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner than later. Many flat owners in Winchelsea will meet the qualifying criteria; that being said a conveyancer can confirm whether you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold residencies in Winchelsea with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 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 conveyancer we work with provide it.
Last Autumn Caleb, started to get near to the eighty-year threshold with the lease on his first floor flat in Winchelsea. Having purchased his home twenty years previously, the lease term was of no bearing. by good luck, he became aware that he would soon be paying an escalated premium for a lease extension. Caleb extended the lease at the eleventh hour in August. Caleb and the freeholder in the end settled on an amount of £5,000 . If the lease had fallen to less than 80 years, the price would have become more costly by a minimum £925.
In 2012 we were contacted by Mr E James who, having purchased a ground floor flat in Winchelsea in November 2010. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative properties in Winchelsea with an extended lease were in the region of £223,400. The average ground rent payable was £60 collected every twelve months. The lease expired on 1 October 2084. Taking into account 59 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £27,600 and £31,800 plus fees.
Dr P Gómez owned a newly refurbished flat in Winchelsea in June 1999. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable premises in Winchelsea with 100 year plus lease were in the region of £205,000. The average ground rent payable was £50 collected annually. The lease came to a finish in 2104. Having 79 years unexpired we estimated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.