Washwood Heath leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Washwood Heath residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Washwood Heath you should see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Washwood Heath 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 lawyer we work with provide it.
Two years ago Leo, started to get near to the eighty-year threshold with the lease on his basement flat in Washwood Heath. In buying his property two decades ago, the lease term was of no significance. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Leo was able to extend his lease just in the nick of time in June. Leo and the landlord who owned the flat above in the end agreed on a premium of £6,000 . If the lease had slipped to less than eighty years, the premium would have escalated by at least £875.
Last Spring we were approach by Mr A Bernard , who completed a one bedroom apartment in Washwood Heath in February 2006. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by a further 90 years. Comparative properties in Washwood Heath with an extended lease were valued about £300,000. The average amount of ground rent was £50 invoiced quarterly. The lease concluded in 2102. Given that there were 76 years remaining we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus expenses.
Dr Isabel Nelson took over the lease of a studio flat in Washwood Heath in March 2002. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical residencies in Washwood Heath with 100 year plus lease were worth £257,800. The average amount of ground rent was £65 collected every twelve months. The lease finished in 2091. Taking into account 65 years outstanding we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of fees.