Unfortunately that a Witham residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Witham property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay 50% 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 extra value that a lease extension will add the property Most flat owners in Witham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
It is generally considered that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
| 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. |
Engaging our service will provide you better control over the value of your Witham leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of lengthy discussions with the freeholder of her studio flat in Witham, Catherine commenced the lease extension process just as her lease was coming close to the crucial eighty-year mark. The legal work was finalised in January 2007. The landlord’s costs were kept to an absolute minimum.
Last September we were e-mailed by Mr and Mrs. B Cooper , who took over the lease of a purpose-built flat in Witham in February 2012. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Similar premises in Witham with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease terminated on 5 February 2089. Having 63 years left we approximated the premium to the landlord to extend the lease to be between £17,100 and £19,800 exclusive of legals.
Last Summer we were phoned by Dr Jade Gómez , who bought a one bedroom apartment in Witham in September 2010. The question was if we could approximate the price would likely be for a ninety year extension to my lease. Similar flats in Witham with an extended lease were valued about £265,000. The average ground rent payable was £55 collected every twelve months. The lease concluded on 20 July 2100. Taking into account 74 years remaining we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.