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Top reasons for Writtle lease extension


Top reasons for lease extension now:

Increase your lease and increase your Writtle property value

Writtle leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Writtle residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Writtle you must see if your lease has between seventy and 90 years remaining. There are compelling reasons why a Writtle leaseholder with a lease having around 80 years unexpired should take action to ensure that a lease extension is effected without delay

Writtle property with a lease extension is almost the same value as a freehold

It is generally considered that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years ahead.

Mortgage lenders may not loan monies with a short lease

Banks and building societies are distinct in their lending criteria. Some set the bar at 75 years left on the lease; others may be happy with anything with more than seventy years. Below sixty years, it may be difficult to obtain a mortgage at all.

Lender Requirement
Barnsley Building Society 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Leeds Building Society 85 years remaining from the start of the mortgage.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges

For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

LEASE EXTENSIONS

We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office

Get in touch with one of our Writtle lease extension solicitors or enfranchisement solicitors

The conveyancing solicitors that we work with undertake Writtle 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.

Writtle Lease Extension Case Studies:

Thomas, Writtle, Essex,

Thomas owned a high value flat in Writtle on the market with a lease of a little over 61 years outstanding. Thomas informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 per annum. No ground rent would be due on a lease extension were Thomas to exercise his statutory right. Thomas procured expert advice and secured an acceptable deal informally and sell the flat.

Writtle case:

Last Christmas we were e-mailed by Mrs Erin Sánchez , who was assigned a lease of a one bedroom flat in Writtle in July 1997. The question was if we could estimate the premium would be for a ninety year lease extension. Similar homes in Writtle with an extended lease were in the region of £191,000. The average ground rent payable was £65 collected annually. The lease terminated on 16 October 2082. Taking into account 58 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 plus professional charges.

Writtle case:

Mr Lucas Torres bought a purpose-built apartment in Writtle in July 2001. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Identical premises in Writtle with a long lease were in the region of £250,000. The average amount of ground rent was £50 collected annually. The lease came to a finish on 15 July 2093. Considering the 69 years left we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.