It’s an underpublicised truth that a Weldon residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Weldon property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining dips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Weldon will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in Weldon with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Using our service will provide you better control over the value of your Weldon leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Trailing unsuccessful correspondence with the landlord of her ground floor flat in Weldon, Louise started the lease extension process as the 80 year deadline was fast approaching. The legal work completed in February 2008. The landlord’s costs were restricted to approximately 600 pounds.
In 2009 we were contacted by Mr W Stewart who, having was assigned a lease of a one bedroom flat in Weldon in July 2005. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Similar homes in Weldon with an extended lease were valued about £245,000. The mid-range amount of ground rent was £45 billed monthly. The lease expired on 6 May 2093. Taking into account 68 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
Mr and Mrs. W Davies acquired a ground floor flat in Weldon in September 2011. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Comparable premises in Weldon with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £55 collected yearly. The lease expired in 2104. Taking into account 79 years unexpired we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus legals.