Wandsworth leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Wandsworth residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Wandsworth you should check if your lease has between 70 and ninety years remaining. There are good reasons why a Wandsworth flat owner with a lease having around eighty years left should take action to make sure that a lease extension is put in place without delay
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately 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 decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Wandsworth 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 lawyer we work with provide it.
In 2014 Omar, started to get close to the eighty-year mark with the lease on his garden flat in Wandsworth. In buying his flat twenty years ago, the unexpired term was of minimal interest. Thankfully, he recognised he would soon be paying way over the odds for a lease extension. Omar was able to extend his lease at the eleventh hour in January. Omar and the freeholder via the managing agents eventually settled on an amount of £5,500 . If the lease had descended to less than eighty years, the amount would have increased by at least £1,050.
Last Winter we were contacted by Dr P Taylor , who moved into a newly refurbished flat in Wandsworth in March 2010. We are asked if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Identical flats in Wandsworth with a long lease were valued around £255,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease ran out in 2095. Taking into account 70 years outstanding we estimated the compensation to the landlord for the lease extension to be between £10,500 and £12,000 plus professional charges.
An example of a Freehold Enfranchisement decision for a Wandsworth premises is 4 Galveston Road in August 2012. The Tribunal determined that the price payable in respect of the purchase of the freehold was £22,650. The Tribunal remited this matter back to the Wandsworth County Court for execution of the freehold Transfer Deed. This case related to 2 flats.