With a residential leasehold property in Wanstead Flats, you are actually purchasing a right to reside in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater especially once there are less than 80 years remaining. Residents in Wanstead Flats with a lease nearing 81 years unexpired should seriously consider extending it sooner as opposed to later. When a lease has below 80 years outstanding, under the relevant Act the freeholder can calculate and demand a larger amount, based on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| 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 conveyancers that we work with procure Wanstead Flats 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.
Rory was the the leasehold proprietor of a studio apartment in Wanstead Flats on the market with a lease of a little over 61 years unexpired. Rory informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Rory to exercise his statutory right. Rory obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
In 2010 we were e-mailed by Mr Y Jackson who, having was assigned a lease of a one bedroom flat in Wanstead Flats in January 1998. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Wanstead Flats with an extended lease were valued about £275,000. The mid-range ground rent payable was £55 invoiced monthly. The lease ran out in 2102. Taking into account 76 years left we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.
Mr Eli Richardson owned a studio flat in Wanstead Flats in September 1999. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar premises in Wanstead Flats with a long lease were in the region of £176,200. The mid-range ground rent payable was £65 collected every twelve months. The lease lapsed on 12 August 2082. Taking into account 56 years outstanding we calculated the premium to the landlord to extend the lease to be between £29,500 and £34,000 not including fees.