Unfortunately that a Wellington residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Wellington property prices.Where your lease has approximately 90 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 dips lower than eighty years - otherwise a higher amount will be due. The majority of flat owners in Wellington 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 timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| 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 undertake 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 conveyancer we work with provide it.
In the wake of 9 months of protracted discussions with the freeholder of her purpose-built apartment in Wellington, Holly started the lease extension process just as the lease was approaching the critical eighty-year threshold. The lease extension completed in July 2005. The freeholder’s costs were kept to an absolute minimum.
In 2013 we were approached by Ms Abbie Sánchez who, having acquired a one bedroom flat in Wellington in May 2004. The question was if we could approximate the premium could be for a 90 year lease extension. Similar premises in Wellington with a long lease were in the region of £235,200. The average amount of ground rent was £45 billed per annum. The lease finished on 23 January 2091. Having 66 years as a residual term we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.
Dr A Norbert took over the lease of a recently refurbished flat in Wellington in April 1999. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Similar homes in Wellington with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 billed every twelve months. The lease terminated on 9 April 2102. Considering the 77 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.