For those whose Werrington flat is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
Leasehold properties in Werrington with in excess of one hundred years remaining 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 circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with handle Werrington 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 lawyer we work with provide it.
Last October Reuben, came seriously near to the eighty-year mark with the lease on his basement apartment in Werrington. Having purchased his flat two decades ago, the length of the lease was of minimal concern. Thankfully, it dawned on him that he would imminently be paying an inflated amount for Extending the lease. Reuben was able to extend his lease just in the nick of time last June. Reuben and the landlord subsequently agreed on the final figure of £6,000 . If the lease had dipped lower than eighty years, the price would have increased by a minimum £1,100.
In 2013 we were e-mailed by Mr and Mrs. C Nelson who, having moved into a ground floor apartment in Werrington in August 2009. We are asked if we could approximate the premium would be for a 90 year lease extension. Comparable homes in Werrington with an extended lease were in the region of £205,000. The average amount of ground rent was £50 billed every twelve months. The lease ended on 10 February 2104. Considering the 79 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 not including costs.
In 2014 we were approached by Mr and Mrs. Y Watson who, having bought a garden apartment in Werrington in April 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Comparative homes in Werrington with an extended lease were in the region of £275,000. The mid-range amount of ground rent was £65 collected quarterly. The lease concluded in 2093. Having 68 years outstanding we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.