It’s an underpublicised truth that a Welling residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Welling property prices.Where your lease has approximately ninety years left, you need to 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 under eighty years - otherwise a higher amount will be due. Most flat owners in Welling will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Welling,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Welling valuers.
During the course of the last few months Eli, started to get close to the eighty-year mark with the lease on his basement apartment in Welling. Having bought his property two decades ago, the lease term was of little bearing. Thankfully, he realised he would imminently be paying an inflated amount for a lease extension. Eli was able to extend his lease just in the nick of time in July. Eli and the freeholder via the management company ultimately settled on a premium of £5,000 . If the lease had slid below eighty years, the amount would have escalated by at least £850.
In 2013 we were phoned by Ms U Lewis who, having acquired a basement flat in Welling in April 1996. We are asked if we could approximate the premium could be for a 90 year lease extension. Identical residencies in Welling with a long lease were worth £183,600. The average amount of ground rent was £65 collected per annum. The lease termination date was on 4 March 2083. Taking into account 57 years unexpired we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of professional charges.
An example of a Lease Extension decision for a Welling property is 103a Footscray Road in January 2014. The tribunal determines that the premium payable for the extended lease should be £34,500 according to the expert witness valuation calculation This case related to 1 flat.