It’s an underpublicised truth that a Winterbourne residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Winterbourne property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be due. Most leasehold owners in Winterbourne will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally accepted that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Winterbourne 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.
Theo owned a studio apartment in Winterbourne on the market with a lease of just over 61 years unexpired. Theo on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be payable on a lease extension were Theo to invoke his statutory right. Theo procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Last month we were contacted by Mr and Mrs. B Fournier , who was assigned a lease of a basement flat in Winterbourne in March 1996. The question was if we could estimate the premium would likely be to extend the lease by 90 years. Identical properties in Winterbourne with 100 year plus lease were in the region of £267,600. The mid-range ground rent payable was £65 collected every twelve months. The lease expiry date was in 2093. Having 67 years left we approximated the premium to the freeholder to extend the lease to be between £14,300 and £16,400 plus professional charges.
In 2013 we were contacted by Dr Holly Mason who, having acquired a recently refurbished flat in Winterbourne in November 1995. We are asked if we could approximate the price could be to extend the lease by ninety years. Comparative flats in Winterbourne with an extended lease were valued about £206,200. The average ground rent payable was £55 collected quarterly. The lease finished in 2082. Considering the 56 years left we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 plus professional charges.