The value of Washington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the remaining term is less than eighty years
Leasehold residencies in Washington with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Washington,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Washington valuers.
In the wake of 6 months of protracted correspondence with the freeholder of her studio flat in Washington, Aimee initiated the lease extension process just as her lease was coming close to the critical eighty-year mark. The lease extension was concluded in March 2012. The freeholder’s fees were kept to an absolute minimum.
In 2011 we were contacted by Mr and Mrs. A Rose who, having moved into a basement flat in Washington in November 1995. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Comparative flats in Washington with an extended lease were valued around £290,000. The mid-range ground rent payable was £45 collected per annum. The lease came to a finish in 2099. Considering the 73 years unexpired we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.
In 2012 we were phoned by Mr and Mrs. C Bonnet who, having purchased a purpose-built apartment in Washington in April 1997. The question was if we could estimate the price would be for a 90 year extension to my lease. Similar properties in Washington with an extended lease were worth £240,600. The mid-range amount of ground rent was £60 collected every twelve months. The lease end date was in 2088. Having 62 years outstanding we approximated the premium to the landlord to extend the lease to be within £21,900 and £25,200 plus legals.