The re-sale value of a leasehold property in Wendover depends on how many years the lease has left to run. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to start the lease extension process when the lease still has 82 years to run so that formalities can be concluded prior to the 80 year cut off point. Leasehold Reform legislation enables Wendover qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Wendover with more than 100 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 premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | 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. |
The conveyancing solicitors that we work with undertake Wendover 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.
In the wake of 6 months of unsuccessful correspondence with the freeholder of her ground floor apartment in Wendover, Lily commenced the lease extension process just as the lease was coming close to the critical eighty-year threshold. The legal work was concluded in November 2010. The freeholder’s charges were restricted to under 650 GBP.
In 2012 we were approached by Mr and Mrs. Y Johnson who, having moved into a newly refurbished flat in Wendover in November 2008. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Similar homes in Wendover with a long lease were worth £189,000. The mid-range ground rent payable was £55 billed yearly. The lease concluded on 20 September 2079. Considering the 53 years unexpired we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 exclusive of costs.
In 2011 we were e-mailed by Mr and Mrs. V Rodríguez who, having completed a recently refurbished flat in Wendover in August 2006. The dilemma was if we could approximate the premium could be to extend the lease by 90 years. Identical homes in Wendover with a long lease were valued around £290,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease terminated on 22 August 2099. Given that there were 73 years outstanding we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.