Unfortunately that a Waddon residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Waddon property prices.Once your lease nears 85ish years, you need to 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 slips lower than eighty years - otherwise a higher premium will be payable. Most flat owners in Waddon will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Retaining our service gives you enhanced control over the value of your Waddon leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy correspondence with the freeholder of her purpose-built flat in Waddon, Tia commenced the lease extension process just as her lease was coming close to the critical eighty-year deadline. The transaction was concluded in January 2007. The freeholder’s costs were restricted to a tad over 550 GBP.
In 2013 we were phoned by Mrs H Young who, having took over the lease of a recently refurbished apartment in Waddon in January 2006. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Similar flats in Waddon with a long lease were worth £225,800. The average amount of ground rent was £60 billed yearly. The lease ended in 2085. Given that there were 60 years left we calculated the premium to the freeholder for the lease extension to be between £24,700 and £28,600 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Waddon flat is 29 Woodstock Road in April 2014. the Tribunal determined that the premiums to be paid into court in respect of the purchase of the freehold registered at HMLR under Title N0.SY3997 should be £7,217. This case was in relation to 4 flats. The number of years remaining on the existing lease(s) was 98 years.