For anyone whose Wargrave home is held on a long lease, our message is clear – if nothing is done, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Chelsea 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Wargrave 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 conveyancer we work with provide it.
During the course of the last few months Riley, came critically close to the eighty-year threshold with the lease on his leasehold apartment in Wargrave. Having bought his property two decades ago, the unexpired term was of little interest. Thankfully, he realised he would soon be paying way over the odds for Extending the lease. Riley extended the lease just under the wire last May. Riley and the landlord in the end agreed on sum of £5,000 . If the lease had dipped lower than 80 years, the figure would have gone up by at least £900.
Last Summer we were called by Mr and Mrs. H Ali , who completed a first floor apartment in Wargrave in July 2005. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Similar properties in Wargrave with 100 year plus lease were valued about £166,400. The average amount of ground rent was £60 collected monthly. The lease lapsed on 28 September 2080. Taking into account 54 years remaining we calculated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 not including costs.
In 2013 we were contacted by Mr and Mrs. B Thompson who, having was assigned a lease of a one bedroom flat in Wargrave in February 2009. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Similar properties in Wargrave with a long lease were valued around £227,800. The mid-range ground rent payable was £45 collected every twelve months. The lease finished on 1 July 2091. Taking into account 65 years left we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of expenses.