Wanstead leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Wanstead tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Wanstead you would be well advised to investigate if your lease has between seventy and 90 years left. There are good reasons why a Wanstead flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is put in place without delay
Leasehold premises in Wanstead with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| 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 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Irrespective of whether you are a tenant or a freeholder in Wanstead,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 experience and the close ties they enjoy with Wanstead valuers.
After unsuccessful correspondence with the freeholder of her basement apartment in Wanstead, Emma initiated the lease extension process just as her lease was approaching the all-important eighty-year deadline. The legal work completed in March 2009. The landlord’s costs were negotiated to a tad over 650 GBP.
Last Winter we were approach by Mr and Mrs. E Girard , who purchased a purpose-built flat in Wanstead in March 1995. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar properties in Wanstead with a long lease were valued about £210,000. The mid-range ground rent payable was £50 collected per annum. The lease terminated on 19 January 2105. Having 80 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Wanstead property is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case was in relation to 2 flats. The unexpired term was 73.92 years.