It’s a harsh truth that a Welling residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Welling property prices.Once your lease gets to 85ish years, you need to start considering 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 falls lower than eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Welling 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 qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in Welling with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you increased control over the value of your Welling leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Aiden, came very close to the eighty-year mark with the lease on his basement apartment in Welling. Having purchased his flat two decades ago, the length of the lease was of little importance. Thankfully, he became aware that he needed to take action soon on a lease extension. Aiden extended the lease just under the wire last March. Aiden and the landlord in the end settled on sum of £5,500 . If the lease had dipped lower than eighty years, the premium would have become more costly by at least £1,025.
Ms O Adams owned a basement apartment in Welling in October 2003. We are asked if we could estimate the premium could be to extend the lease by 90 years. Identical residencies in Welling with a long lease were in the region of £246,800. The average amount of ground rent was £60 billed per annum. The lease finished in 2076. Given that there were 50 years unexpired we calculated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 plus fees.
An example of a Lease Extension matter before the tribunal for a Welling flat 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 was in relation to 1 flat.