Unfortunately that a Watford residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Watford property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Watford will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Watford 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 Sam, came very near to the 80-year mark with the lease on his garden apartment in Watford. In buying his flat 18 years previously, the length of the lease was of no importance. Thankfully, he recognised he needed to take action soon on a lease extension. Sam arranged for a lease extension at the eleventh hour in April. Sam and the freeholder via the managing agents eventually settled on an amount of £5,500 . If he not met the deadline, the amount would have increased by at least £1,150.
Mr and Mrs. F Kelly was assigned a lease of a basement apartment in Watford in January 2001. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Similar flats in Watford with an extended lease were valued around £285,000. The average amount of ground rent was £55 collected per annum. The lease expired on 6 October 2104. Considering the 79 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including legals.
An example of a Lease Extension case for a Watford premises is Flats 8, 11 and 15 Craigmore Court 46 Murray Road in December 2013. The tribunal held that the price payable by the Applicant tenant of Flat 8 to acquire an extended lease shall be £26,438 plus £1 to the intermediate lessee . The tribunal held that the price payable by the Applicant tenants of Flat 11 to acquire an extended lease shall be £26,791 plus £1 to the intermediate lessee. The tribunal held that the price payable by the Applicant tenant of Flat 15 to acquire an extended lease shall be £26,638 plus £1 to the intermediate lessee . This case affected 3 flats. The unexpired lease term was 71 years.