Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Walkden. Inevitably, the length of lease left reduces as time goes by. This is often overlooked and only becomes a problem when the residence has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension. Eligible leaseholders in Walkden have the right to extend the lease for an additional 90 years under statute. You should give careful attention before putting off your Walkden lease extension. Holding off that expense now simply increases the price you will ultimately incur to extend your lease
Leasehold properties in Walkden with in excess of one hundred 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 property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Walkden can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Walkden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
David owned a studio flat in Walkden on the market with a lease of a few days over 72 years unexpired. David informally spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were David to exercise his statutory right. David procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
In 2010 we were called by Dr U Campbell who, having moved into a basement apartment in Walkden in May 2012. The dilemma was if we could approximate the premium would likely be for a 90 year extension to my lease. Similar flats in Walkden with a long lease were in the region of £208,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease ran out in 2087. Considering the 61 years outstanding we approximated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 not including costs.
Dr O Leroy owned a ground floor flat in Walkden in January 1997. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparable premises in Walkden with a long lease were worth £260,000. The average ground rent payable was £50 collected every twelve months. The lease elapsed in 2098. Given that there were 72 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.