Washwood Heath 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 the lease gets more expensive. It is the case that most Washwood Heath tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Washwood Heath you really ought to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
The conveyancing solicitors that we work with procure 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 conveyancer we work with provide it.
During the course of the last few months Andrew, came critically near to the eighty-year mark with the lease on his first floor flat in Washwood Heath. Having bought his flat two decades ago, the lease term was of minimal bearing. Thankfully, he became aware that he would soon be paying an inflated amount for a lease extension. Andrew extended the lease just under the wire last March. Andrew and the freeholder via the management company in the end settled on an amount of £5,500 . If he not met the deadline, the price would have gone up by at least £950.
Dr Charlie Patel completed a recently refurbished flat in Washwood Heath in June 2003. The question was if we could approximate the price would likely be for a ninety year extension to my lease. Comparative residencies in Washwood Heath with a long lease were worth £191,400. The average amount of ground rent was £55 billed monthly. The lease came to a finish in 2079. Taking into account 54 years outstanding we calculated the premium to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of expenses.
Last Spring we were contacted by Mr and Mrs. U Parker , who moved into a studio apartment in Washwood Heath in January 1998. The question was if we could shed any light on how much (approximately) premium would be to prolong the lease by an additional years. Identical properties in Washwood Heath with a long lease were in the region of £295,000. The mid-range ground rent payable was £45 collected per annum. The lease ended in 2099. 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 plus professional charges.