For those whose Much Wenlock home is held on a long lease, our message is clear – if you do nothing, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
Leasehold premises in Much Wenlock with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers 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 conveyancer we work with provide it.
Last Spring Aaron, came precariously near to the 80-year threshold with the lease on his purpose- built flat in Much Wenlock. In buying his flat twenty years previously, the lease term was of little concern. As luck would have it, he recognised he needed to take steps soon on a lease extension. Aaron was able to extend his lease at the eleventh hour in September. Aaron and the landlord who owned the flat above ultimately agreed on a premium of £6,000 . If the lease had slipped lower than eighty years, the figure would have become more costly by a minimum £1,100.
Mr and Mrs. E Bernard completed a one bedroom apartment in Much Wenlock in July 2012. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Similar residencies in Much Wenlock with 100 year plus lease were valued around £255,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease ran out on 4 February 2096. Given that there were 70 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
Mr and Mrs. S Martínez owned a first floor flat in Much Wenlock in August 2012. The dilemma was if we could approximate the price could be to prolong the lease by 90 years. Comparable residencies in Much Wenlock with 100 year plus lease were worth £246,800. The mid-range ground rent payable was £60 collected quarterly. The lease terminated in 2076. Having 50 years left we calculated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 plus costs.