Walkington residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
Leasehold premises in Walkington with in excess of one hundred years unexpired 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with undertake Walkington 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 conveyancing solicitor we work with provide it.
Oliver was the the leasehold proprietor of a studio apartment in Walkington being sold with a lease of a little over 72 years unexpired. Oliver on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 per annum. No ground rent would be payable on a lease extension were Oliver to exercise his statutory right. Oliver obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2014 we were called by Mr and Mrs. T Martin who, having owned a recently refurbished flat in Walkington in June 1998. The question was if we could approximate the price would likely be for a ninety year lease extension. Comparative homes in Walkington with 100 year plus lease were valued about £198,800. The average amount of ground rent was £55 billed monthly. The lease came to a finish on 10 March 2080. Taking into account 55 years left we approximated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 plus professional charges.
Mr and Mrs. M Laurent moved into a one bedroom flat in Walkington in October 2000. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Comparative homes in Walkington with 100 year plus lease were in the region of £300,000. The average amount of ground rent was £50 invoiced monthly. The lease ended on 11 January 2100. Given that there were 75 years outstanding we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of legals.