As the length of the unexpired term of a Warwick domestic lease lessens so does its value and therefore the value of your property. If the residual term has, over 99 years remaining then this decrease may be negligible however there will become a stage when a lease has under than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the primary rational as to why you should consider extending without delay. Many flat owners in Warwick will meet the qualifying criteria; that being said a conveyancing solicitor should be able to confirm whether you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold premises in Warwick with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Warwick can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Warwick lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Stanley, started to get near to the eighty-year mark with the lease on his garden flat in Warwick. Having bought his property twenty years ago, the lease term was of no relevance. As luck would have it, he became aware that he needed to take steps soon on Extending the lease. Stanley was able to extend his lease just in the nick of time last July. Stanley and the freeholder via the managing agents subsequently agreed on sum of £5,000 . If the lease had descended lower than 80 years, the sum would have gone up by a minimum £1,000.
Last month we were approach by Ms Sian Martínez , who acquired a first floor apartment in Warwick in October 1995. We are asked if we could estimate the price would be to extend the lease by a further 90 years. Identical premises in Warwick with a long lease were in the region of £208,600. The average amount of ground rent was £60 invoiced every twelve months. The lease came to a finish in 2082. Having 57 years left we calculated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 plus fees.
Dr C Peterson took over the lease of a first floor flat in Warwick in September 2005. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative properties in Warwick with a long lease were valued about £200,000. The mid-range ground rent payable was £50 invoiced per annum. The lease elapsed on 8 January 2102. Taking into account 77 years unexpired we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including professional charges.