Witham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Witham residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Witham you should check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
The conveyancers that we work with procure 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 conveyancer we work with provide it.
Teddy was the the leasehold owner of a studio apartment in Witham being marketed with a lease of fraction over sixty years remaining. Teddy on an informal basis spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Teddy to invoke his statutory right. Teddy procured expert advice and was able to make an informed decision and handle with the matter and sell the flat.
In 2011 we were approached by Dr Luke Martinez who, having owned a one bedroom flat in Witham in September 2010. The question was if we could approximate the premium would likely be for a 90 year lease extension. Similar homes in Witham with 100 year plus lease were in the region of £261,600. The average ground rent payable was £60 invoiced every twelve months. The lease ran out on 22 April 2077. Considering the 52 years remaining we calculated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of costs.
Last Spring we were contacted by Mr and Mrs. Y Hernández , who completed a one bedroom flat in Witham in March 2001. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable flats in Witham with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 collected monthly. The lease came to a finish in 2088. Considering the 63 years outstanding we approximated the premium to the landlord to extend the lease to be within £17,100 and £19,800 plus fees.