Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Woodbury. Clearly, the period of lease left shortens over time. This may slip by relatively unnoticed when the flat or house needs to be sold or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension. Qualifying long lease owners in Woodbury have the right to extend the lease for an additional ninety years under legislation. You should give due consideration before putting off your Woodbury lease extension. Putting off that expense now likely increases the price you will ultimately have to pay to extend your lease
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises 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 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; |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Woodbury can be a difficult process. We recommend you procure guidance from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Woodbury lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Elijah, came perilously close to the 80-year threshold with the lease on his purpose- built flat in Woodbury. Having bought his flat two decades ago, the unexpired term was of minimal importance. Fortunately, he became aware that he would imminently be paying an escalated premium for Extending the lease. Elijah arranged for a lease extension just ahead of time in September. Elijah and the freeholder in the end agreed on the final figure of £5,500 . If he failed to meet the deadline, the amount would have gone up by at least £1,100.
Mrs B Taylor owned a purpose-built flat in Woodbury in June 2012. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Similar flats in Woodbury with a long lease were in the region of £223,400. The average amount of ground rent was £60 collected monthly. The lease lapsed on 18 February 2084. Having 59 years unexpired we approximated the compensation to the landlord to extend the lease to be between £27,600 and £31,800 plus fees.
In 2014 we were called by Ms B Wood who, having completed a ground floor flat in Woodbury in July 2001. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Comparative properties in Woodbury with a long lease were valued about £205,000. The average amount of ground rent was £50 collected every twelve months. The lease ran out in 2104. Given that there were 79 years unexpired we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of legals.