The re-sale value of a leasehold property in Wellington is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the lease extension process when a lease still has 82 years unexpired so that a lease extension can be addressed ahead of the 80 year threshold. Current legislation entitles Wellington qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a supplemental term of 90 years. The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 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 |
|---|---|
| Accord Mortgages | |
| Bank of Scotland | |
| Birmingham Midshires | |
| The Mortgage Works | |
| Yorkshire Building Society |
The conveyancing solicitors that we work with handle Wellington 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.
Austin was the the leasehold owner of a high value apartment in Wellington on the market with a lease of just over fifty eight years remaining. Austin on an informal basis spoke with his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Austin to invoke his statutory right. Austin procured expert legal guidance and was able to make an informed judgement and handle with the matter and sell the flat.
In 2012 we were approached by Dr S Carter who, having owned a ground floor apartment in Wellington in March 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparable properties in Wellington with a long lease were worth £261,600. The average amount of ground rent was £60 invoiced annually. The lease ran out on 23 June 2078. Taking into account 52 years outstanding we approximated the premium to the freeholder to extend the lease to be between £39,000 and £45,000 not including costs.
In 2012 we were phoned by Ms I Moore who, having bought a purpose-built flat in Wellington in June 2006. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Identical flats in Wellington with 100 year plus lease were in the region of £218,000. The mid-range amount of ground rent was £45 collected monthly. The lease finished in 2089. Having 63 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 plus legals.