It’s an underpublicised certainty that a Wem residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Wem property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term falls under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Wem will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the process.
Leasehold residencies in Wem with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Lease extensions in Wem can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Wem lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Daniel, started to get near to the eighty-year threshold with the lease on his leasehold apartment in Wem. In buying his property two decades ago, the length of the lease was of no relevance. Fortunately, he realised he needed to take action soon on Extending the lease. Daniel extended the lease just under the wire in January. Daniel and the landlord eventually settled on sum of £5,000 . If the lease had fallen to less than 80 years, the sum would have increased by a minimum £925.
Mr and Mrs. H Brooks bought a ground floor apartment in Wem in April 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Comparative flats in Wem with a long lease were in the region of £300,000. The mid-range ground rent payable was £50 invoiced yearly. The lease came to a finish on 17 September 2101. Having 75 years left we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
In 2011 we were approached by Mr and Mrs. F Norbert who, having bought a one bedroom flat in Wem in August 2012. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Identical premises in Wem with 100 year plus lease were in the region of £250,400. The mid-range amount of ground rent was £65 invoiced monthly. The lease terminated on 18 October 2090. Having 64 years left we estimated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 plus professional charges.