Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Wapping. Inevitably, the period of lease remaining shortens over time. This may pass by relatively unnoticed when the property has to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Wapping have the right to extend the lease for a further ninety years under statute. Please give careful consideration before putting off your Wapping lease extension. Putting off that expense now only increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 lawyers that we work with handle Wapping 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.
Kian was the the leasehold proprietor of a high value apartment in Wapping on the market with a lease of just over 72 years remaining. Kian on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were Kian to exercise his statutory right. Kian procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
In 2009 we were contacted by Dr U Morris who, having moved into a ground floor flat in Wapping in March 2004. The dilemma was if we could estimate the price would be for a 90 year lease extension. Similar flats in Wapping with an extended lease were valued around £255,000. The average amount of ground rent was £50 billed annually. The lease lapsed in 2096. Taking into account 70 years remaining we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
An example of a Freehold Enfranchisement case for a Wapping residence is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case was in relation to 41 flats. The number of years remaining on the existing lease(s) was 107 years.