As the length of the unexpired term of a Wokingham residential lease lessens so does its value and therefore the value of your property. Where the residual term has, beyond 125 years to run then this decrease may be fractional that being said there will become a stage when a lease has fewer than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary reason why you should consider extending without delay. The majority of flat owners in Wokingham will meet the qualifying criteria; that being said a conveyancer can advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold residencies in Wokingham with in excess of 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 property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Lloyds TSB Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancing solicitors that we work with procure Wokingham 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.
Leo owned a high value flat in Wokingham on the market with a lease of a few days over fifty eight years outstanding. Leo informally spoke with his freeholder being a well known London-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Mrs Isobel Brooks was assigned a lease of a purpose-built apartment in Wokingham in June 2006. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Comparative flats in Wokingham with a long lease were in the region of £285,000. The mid-range amount of ground rent was £45 billed annually. The lease lapsed on 3 August 2096. Having 72 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.
Last September we were approach by Mr Blake Nelson , who moved into a ground floor apartment in Wokingham in May 2001. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by a further 90 years. Identical residencies in Wokingham with 100 year plus lease were in the region of £233,200. The mid-range ground rent payable was £60 billed quarterly. The lease ran out in 2085. Having 61 years remaining we approximated the compensation to the freeholder to extend the lease to be between £22,800 and £26,400 not including expenses.