When it comes to long leasehold premises in Much Wenlock, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly once there are fewer than 80 years remaining. Leasehold owners in Much Wenlock with a lease approaching 81 years remaining should seriously consider extending it without delay. When the lease term has fewer than 80 years remaining, under the current Act the landlord is entitled to calculate and levy a larger amount, based on a technical calculation, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Much Wenlock 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 lawyer we work with provide it.
After protracted negotiations with the landlord of her first floor apartment in Much Wenlock, Louise initiated the lease extension process as the 80 year mark was fast nearing. The transaction was concluded in July 2012. The landlord’s charges were kept to an absolute minimum.
Last Autumn we were approach by Mr and Mrs. N Clarke , who purchased a ground floor flat in Much Wenlock in January 2010. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparable properties in Much Wenlock with 100 year plus lease were worth £191,000. The mid-range ground rent payable was £65 billed every twelve months. The lease ran out in 2084. Taking into account 58 years left we estimated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 plus expenses.
In 2011 we were contacted by Dr Jonathan David who, having acquired a studio apartment in Much Wenlock in October 1996. The dilemma was if we could approximate the price would likely be to extend the lease by a further 90 years. Identical residencies in Much Wenlock with an extended lease were valued around £250,000. The average amount of ground rent was £50 billed every twelve months. The lease expired on 16 August 2095. Taking into account 69 years remaining we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including professional charges.