It’s a harsh truth that a Warkworth residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Warkworth property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be due. Most leasehold owners in Warkworth will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Warkworth 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.
Noah owned a high value flat in Warkworth being sold with a lease of a little over 72 years unexpired. Noah informally contacted his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Noah to invoke his statutory right. Noah obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2012 we were approached by Dr N Clarke who, having purchased a one bedroom apartment in Warkworth in January 2001. The dilemma was if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Identical residencies in Warkworth with a long lease were in the region of £255,000. The mid-range ground rent payable was £50 collected annually. The lease concluded in 2096. Considering the 70 years unexpired we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
In 2010 we were phoned by Mrs P Ward who, having was assigned a lease of a one bedroom flat in Warkworth in May 1997. We are asked if we could estimate the price would be to extend the lease by 90 years. Identical homes in Warkworth with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 collected yearly. The lease elapsed on 2 September 2076. Given that there were 50 years remaining we approximated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 plus expenses.