For anyone whose Witham flat is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
Leasehold properties in Witham with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake Witham 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.
Eli was the the leasehold proprietor of a conversion flat in Witham on the market with a lease of fraction over 59 years remaining. Eli on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Eli to exercise his statutory right. Eli obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
In 2013 we were phoned by Mr Adam Hernández who, having completed a one bedroom apartment in Witham in October 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar residencies in Witham with 100 year plus lease were valued about £250,000. The average amount of ground rent was £50 collected quarterly. The lease end date was in 2094. Having 69 years left we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.
Last April we were contacted by Ms Eleanor Pérez , who acquired a garden apartment in Witham in August 2011. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative flats in Witham with 100 year plus lease were in the region of £290,000. The average ground rent payable was £60 invoiced yearly. The lease expired in 2105. Given that there were 80 years left we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of expenses.