Walkington Lease Extension - Free Consultation

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Main reasons to commence your Walkington lease extension


Main reasons to start your Walkington lease extension today:

A Walkington lease depreciates with the years remaining on the lease.

Walkington leases on residential deteriorating in value. if your lease has about ninety years remaining, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease drops below this level then you begin incurring an additional element called marriage value. Leasehold owners in Walkington will usually qualify for a lease extension; however it’s a good idea to check with a conveyancer to confirm your eligibility. In some circumstances you may not be entitled. There are also strict deadlines and formalities to follow once the process is triggered so it’s sensible to be guided by a conveyancer during the process.

Walkington property with a lease extension is almost the same value as a freehold

Leasehold premises in Walkington with more than 100 years remaining on the lease are sometimes 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 purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.

Lenders will not lend on a short lease

Most banks have tightened lending criteria in the last ten years and borrowers are encountering difficulties in arranging finance or re-mortgage against property with shorter lease terms, particularly under 75 years as they are considered to be insufficient security.

Lender Requirement
Barclays plc Mortgage term plus 25 years provided that leases of less than 85 years are be referred to us for approval.
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.
National Westminster Bank Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.
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



The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

Get in touch with one of our Walkington lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a freeholder in Walkington,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Walkington valuers.

Walkington Lease Extension Example Cases:

Alice, Walkington, East Yorkshire,

Off the back of unsuccessful negotiations with the freeholder of her first floor apartment in Walkington, Alice commenced the lease extension process as the eighty year deadline was quickly approaching. The transaction was finalised in August 2006. The freeholder’s costs were negotiated to below 500 GBP.

Walkington case:

Dr I Nguyen bought a ground floor apartment in Walkington in October 2000. The question was if we could estimate the price could be to extend the lease by 90 years. Similar homes in Walkington with 100 year plus lease were valued about £290,000. The average amount of ground rent was £45 invoiced per annum. The lease termination date was in 2093. Given that there were 72 years outstanding we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including fees.

Walkington case:

Mr O Gunderson completed a one bedroom apartment in Walkington in January 2005. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative premises in Walkington with a long lease were valued around £235,600. The mid-range ground rent payable was £60 collected yearly. The lease termination date was on 15 August 2083. Given that there were 62 years outstanding we estimated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of professional charges.