It’s a harsh certainty that a Walderslade residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Walderslade 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 80 years - otherwise a higher premium will be due. Most flat owners in Walderslade will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations 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 lawyer for the duration of the formalities.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Irrespective of whether you are a tenant or a landlord in Walderslade,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Walderslade valuers.
Benjamin owned a 2 bedroom flat in Walderslade on the market with a lease of just over sixty years outstanding. Benjamin informally approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Benjamin to invoke his statutory right. Benjamin obtained expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
In 2009 we were phoned by Mr Isaac Hill who, having was assigned a lease of a garden flat in Walderslade in February 2004. The question was if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Comparable flats in Walderslade with 100 year plus lease were in the region of £181,600. The average ground rent payable was £55 billed monthly. The lease ran out on 8 June 2077. Given that there were 52 years left we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including legals.
In 2011 we were contacted by Dr Harrison White who, having was assigned a lease of a purpose-built flat in Walderslade in April 2007. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical premises in Walderslade with a long lease were valued about £285,000. The mid-range ground rent payable was £45 invoiced annually. The lease expired in 2097. Having 72 years left we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of costs.