Unfortunately that a West Cross residential lease is a deteriorating asset. As the lease term diminishes 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 West Cross property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be due. The majority of flat owners in West Cross will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 conveyancing solicitors that we work with procure West Cross 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 conveyancer we work with provide it.
Last October Cameron, started to get close to the 80-year threshold with the lease on his leasehold flat in West Cross. Having purchased his home two decades ago, the lease term was of minimal interest. Luckily, he recognised he needed to take steps soon on Extending the lease. Cameron extended the lease just in the nick of time in June. Cameron and the landlord who owned the flat above in the end agreed on the final figure of £5,500 . If he not met the deadline, the sum would have become more costly by a minimum £1,025.
In 2009 we were approached by Mr and Mrs. G Morris who, having took over the lease of a garden apartment in West Cross in August 2002. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Similar residencies in West Cross with an extended lease were valued about £290,000. The average amount of ground rent was £45 collected quarterly. The lease came to a finish on 15 May 2099. Given that there were 73 years remaining we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.
Mr and Mrs. A Hernández completed a first floor flat in West Cross in September 1998. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical residencies in West Cross with an extended lease were worth £240,600. The mid-range ground rent payable was £60 billed annually. The lease terminated on 5 June 2088. Given that there were 62 years as a residual term we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 not including costs.