The market value of a leasehold property in Wapping is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be concluded in advance of the 80 year threshold. Statute entitles Wapping qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
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 further ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake 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 lawyer we work with provide it.
Subsequent to unsuccessful discussions with the landlord of her ground floor apartment in Wapping, Ashleigh started the lease extension process just as her lease was approaching the crucial 80-year mark. The legal work was concluded in August 2009. The freeholder’s costs were negotiated to less than 600 GBP.
In 2010 we were contacted by Mrs Kayleigh Howard who, having moved into a studio flat in Wapping in February 2005. The question was if we could estimate the premium would be for a 90 year extension to my lease. Comparative properties in Wapping with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 billed every twelve months. The lease elapsed on 7 November 2100. Considering the 75 years remaining we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.
An example of a Freehold Enfranchisement decision for a Wapping premises 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 remaining number of years on the lease was 107 years.