For those whose Wem flat is held on a long lease, the message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease.
Leasehold properties in Wem with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
Irrespective of whether you are a tenant or a landlord in Wem,the lease extension lawyers 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 Wem valuers.
Off the back of unsuccessful negotiations with the freeholder of her basement flat in Wem, Kirsty started the lease extension process just as her lease was approaching the critical eighty-year threshold. The legal work was concluded in November 2014. The landlord’s costs were negotiated to about 700 GBP.
Mr N Laurent bought a ground floor apartment in Wem in August 2004. We are asked if we could estimate the premium could be to extend the lease by 90 years. Identical residencies in Wem with an extended lease were valued around £210,000. The average ground rent payable was £50 billed per annum. The lease came to a finish in 2106. Considering the 80 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus professional charges.
Last January we were contacted by Mr and Mrs. S Ali , who owned a garden apartment in Wem in February 2006. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparative residencies in Wem with a long lease were worth £280,000. The average ground rent payable was £45 billed monthly. The lease finished in 2095. Having 69 years outstanding we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including costs.