Wythenshawe leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Wythenshawe tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Wythenshawe you would be well advised to investigate if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Wythenshawe with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Wythenshawe 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.
Sebastian owned a studio apartment in Wythenshawe on the market with a lease of a few days over 59 years remaining. Sebastian informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Sebastian to exercise his statutory right. Sebastian procured expert advice and was able to make an informed decision and handle with the matter and sell the property.
In 2009 we were phoned by Dr Ali Morris who, having completed a one bedroom apartment in Wythenshawe in May 2007. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Comparative premises in Wythenshawe with 100 year plus lease were worth £254,200. The mid-range amount of ground rent was £60 billed yearly. The lease concluded on 10 January 2076. Taking into account 51 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £43,700 and £50,600 plus legals.
Dr F Ward acquired a first floor flat in Wythenshawe in February 1997. The dilemma was if we could estimate the price could be for a ninety year extension to my lease. Comparable properties in Wythenshawe with 100 year plus lease were in the region of £210,600. The mid-range ground rent payable was £45 billed per annum. The lease finished on 21 October 2087. Considering the 62 years outstanding we estimated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 plus fees.