It’s a harsh truth that a Woodford Green residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Woodford Green property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be due. Most leasehold owners in Woodford Green will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Woodford Green 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.
Last October Teddy, started to get near to the eighty-year mark with the lease on his studio apartment in Woodford Green. Having bought his flat two decades ago, the unexpired term was of no concern. Thankfully, he recognised he needed to take action soon on Extending the lease. Teddy arranged for a lease extension at the eleventh hour in March. Teddy and the freeholder subsequently agreed on sum of £6,000 . If the lease had descended below 80 years, the premium would have gone up by a minimum £925.
In 2013 we were called by Ms Bethan Stewart who, having owned a basement apartment in Woodford Green in June 2011. We are asked if we could estimate the price could be for a 90 year extension to my lease. Similar premises in Woodford Green with a long lease were in the region of £205,000. The average ground rent payable was £50 billed annually. The lease concluded in 2104. Taking into account 78 years left we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Woodford Green property is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The number of years remaining on the existing lease(s) was 69.26 years.