Wednesfield leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Wednesfield residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Wednesfield you would be well advised to check if your lease has between 70 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 in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| Yorkshire Building Society | 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. |
The conveyancers that we work with procure Wednesfield 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 conveyancing solicitor we work with provide it.
Last October Nathaniel, came very near to the 80-year threshold with the lease on his one bedroom apartment in Wednesfield. In buying his home twenty years previously, the unexpired term was of little relevance. by good luck, he realised he would imminently be paying way over the odds for Extending the lease. Nathaniel was able to extend his lease just under the wire in August. Nathaniel and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If he failed to meet the deadline, the price would have become more exhorbitant by a minimum £1,000.
In 2012 we were called by Dr Chloe Davies who, having owned a garden flat in Wednesfield in July 2009. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable flats in Wednesfield with an extended lease were in the region of £200,000. The average ground rent payable was £50 billed per annum. The lease finished in 2103. Considering the 77 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.
In 2014 we were e-mailed by Dr Maisie Parker who, having moved into a one bedroom flat in Wednesfield in November 2012. The dilemma was if we could estimate the price would be for a 90 year extension to my lease. Comparative residencies in Wednesfield with an extended lease were valued about £260,200. The mid-range ground rent payable was £65 invoiced yearly. The lease ended in 2092. Taking into account 66 years outstanding we estimated the premium to the landlord to extend the lease to be within £14,300 and £16,400 not including legals.