Ware leases on residential properties are gradually losing value. if your lease has in the region of ninety years unexpired, you should start thinking about a lease extension. If lease term is under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Ware will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In some cases you may not be entitled. There are prescribed timetables and steps to follow once the process has commenced so it’s sensible to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Coventry Building Society | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Ware leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Gabriel owned a studio flat in Ware being marketed with a lease of a little over 72 years remaining. Gabriel on an informal basis approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Gabriel to invoke his statutory right. Gabriel procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
Ms F Allen acquired a studio apartment in Ware in February 2008. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable properties in Ware with a long lease were worth £264,000. The average ground rent payable was £60 invoiced monthly. The lease concluded in 2078. Considering the 53 years outstanding we estimated the premium to the landlord for the lease extension to be between £37,100 and £42,800 exclusive of legals.
Last Autumn we were phoned by Mr Logan Wood , who purchased a ground floor flat in Ware in May 2010. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Ware with 100 year plus lease were valued about £225,400. The average ground rent payable was £45 collected quarterly. The lease termination date was on 20 January 2089. Considering the 64 years as a residual term we approximated the premium to the landlord to extend the lease to be within £16,200 and £18,600 exclusive of expenses.