There is no doubt about it a leasehold property in Wem is a wasting asset as a result of the diminishing lease term. If the lease has, in excess of one hundred years to run then this decrease may be of little impact that being said there will become a stage when a lease has under than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should consider extending without delay. Many flat owners in Wem will meet the qualifying criteria; that being said a conveyancer can advise if you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Wem 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.
Last year Luca, came perilously close to the 80-year threshold with the lease on his garden apartment in Wem. Having purchased his property two decades ago, the length of the lease was of little importance. As luck would have it, he noticed he would soon be paying way over the odds for Extending the lease. Luca extended the lease just under the wire last July. Luca and the landlord eventually agreed on a premium of £5,000 . If he had missed the deadline, the price would have gone up by a minimum £1,075.
In 2011 we were approached by Mr and Mrs. K Hernández who, having purchased a recently refurbished apartment in Wem in January 2010. The dilemma was if we could approximate the premium could be for a ninety year lease extension. Identical premises in Wem with 100 year plus lease were worth £248,000. The average amount of ground rent was £65 collected monthly. The lease concluded in 2089. Considering the 63 years outstanding we calculated the premium to the landlord for the lease extension to be within £20,000 and £23,000 exclusive of costs.
In 2014 we were called by Dr K Díaz who, having acquired a one bedroom flat in Wem in January 1996. We are asked if we could estimate the price could be to extend the lease by a further 90 years. Similar homes in Wem with a long lease were worth £181,600. The average amount of ground rent was £55 billed every twelve months. The lease concluded on 1 November 2078. Given that there were 52 years left we estimated the premium to the landlord to extend the lease to be between £30,400 and £35,200 plus legals.