Washington leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Washington tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Washington you would be well advised to check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Lease extensions in Washington can be a difficult process. We recommend you secure professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
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 in-depth market knowledge dealing with Washington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Harvey, started to get close to the 80-year threshold with the lease on his garden apartment in Washington. In buying his flat two decades ago, the unexpired term was of little importance. Thankfully, he became aware that he would soon be paying an inflated amount for Extending the lease. Harvey extended the lease just under the wire in July. Harvey and the freeholder ultimately settled on the final figure of £5,500 . If the lease had slipped to less than 80 years, the price would have gone up by at least £900.
Last month we were phoned by Ms G González , who purchased a basement apartment in Washington in October 1998. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Comparable residencies in Washington with a long lease were in the region of £191,400. The average ground rent payable was £55 billed annually. The lease lapsed on 19 June 2080. Taking into account 54 years left we calculated the compensation to the landlord to extend the lease to be within £34,200 and £39,600 plus legals.
Last Spring we were contacted by Mr Ethan Vincent , who bought a one bedroom apartment in Washington in October 1995. The question was if we could estimate the premium would be for a 90 year lease extension. Similar premises in Washington with a long lease were worth £295,000. The average ground rent payable was £45 billed yearly. The lease elapsed in 2100. Given that there were 74 years as a residual term we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.