The market value of Witham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the unexpired lease term is less than 80 years
Leasehold premises in Witham with over 100 years remaining 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Godiva Mortgages | 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. |
Irrespective of whether you are a tenant or a freeholder in Witham,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Witham valuers.
Following unsuccessful correspondence with the freeholder of her one bedroom flat in Witham, Louise started the lease extension process just as her lease was nearing the critical 80-year deadline. The legal work was finalised in August 2006. The landlord’s costs were restricted to a tad over six hundred pounds.
Mrs Abigail Thomas purchased a purpose-built apartment in Witham in June 2009. We are asked if we could estimate the price would be to prolong the lease by a further 90 years. Identical properties in Witham with 100 year plus lease were worth £245,000. The mid-range ground rent payable was £50 billed annually. The lease came to a finish on 5 September 2093. Taking into account 68 years left we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
Last Winter we were e-mailed by Mr and Mrs. E Phillips , who took over the lease of a newly refurbished apartment in Witham in January 2004. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Comparable premises in Witham with an extended lease were valued about £285,000. The average amount of ground rent was £55 invoiced every twelve months. The lease terminated in 2104. Taking into account 79 years outstanding we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including expenses.