It’s an underpublicised truth that a Wisbech residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Wisbech property market.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term drops below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Wisbech will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Wisbech 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.
Trailing lengthy discussions with the freeholder of her first floor apartment in Wisbech, Millie commenced the lease extension process just as her lease was coming close to the critical eighty-year mark. The transaction was finalised in February 2013. The landlord’s fees were kept to an absolute minimum.
Ms F Wilson bought a ground floor flat in Wisbech in July 1996. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparable properties in Wisbech with a long lease were valued about £173,800. The mid-range ground rent payable was £65 collected per annum. The lease ran out on 10 October 2081. Considering the 55 years remaining we calculated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of professional charges.
Mrs Gemma Smith purchased a ground floor apartment in Wisbech in February 2005. The question was if we could estimate the premium could be for a 90 year extension to my lease. Comparative premises in Wisbech with a long lease were valued around £235,200. The mid-range ground rent payable was £45 collected annually. The lease terminated on 15 February 2092. Having 66 years remaining we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of expenses.