It’s an underpublicised certainty that a Droitwich Spa residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Droitwich Spa property prices.Once your lease gets to 85ish years, you should 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 falls lower than eighty years - otherwise a higher premium will be payable. The majority of flat owners in Droitwich Spa will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally accepted that a property with more than 100 years unexpired lease term 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 ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Engaging our service will provide you better control over the value of your Droitwich Spa leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Austin, came precariously close to the 80-year mark with the lease on his studio apartment in Droitwich Spa. Having purchased his flat two decades ago, the unexpired term was of little relevance. Thankfully, he recognised he needed to take action soon on a lease extension. Austin arranged for a lease extension at the eleventh hour last September. Austin and the landlord who owned the flat above subsequently settled on a premium of £5,000 . If the lease had gone to less than eighty years, the amount would have increased by a minimum £950.
In 2011 we were approached by Mr and Mrs. R Adams who, having took over the lease of a purpose-built apartment in Droitwich Spa in August 2002. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Similar flats in Droitwich Spa with an extended lease were worth £250,000. The average ground rent payable was £50 invoiced annually. The lease terminated in 2095. Having 69 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
Mr and Mrs. C Morel took over the lease of a ground floor apartment in Droitwich Spa in March 1995. We are asked if we could approximate the price could be for a 90 year lease extension. Comparative residencies in Droitwich Spa with a long lease were in the region of £285,000. The mid-range amount of ground rent was £55 collected monthly. The lease expired in 2106. Given that there were 80 years unexpired we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus expenses.