Unfortunately that a Westbourne residential lease is a deteriorating 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 reduction being disguised by increases in the Westbourne property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining slips under 80 years, you will end up paying 50% 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 Most flat owners in Westbourne will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
The conveyancers that we work with procure Westbourne 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.
Aaron was the the leasehold owner of a high value apartment in Westbourne being marketed with a lease of fraction over 59 years unexpired. Aaron on an informal basis approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 annually. No ground rent would be due on a lease extension were Aaron to exercise his statutory right. Aaron procured expert advice and secured satisfactory deal informally and readily saleable.
Last Winter we were called by Mr and Mrs. U Girard , who bought a first floor flat in Westbourne in February 2006. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparative properties in Westbourne with 100 year plus lease were in the region of £208,600. The mid-range amount of ground rent was £60 collected quarterly. The lease elapsed on 16 July 2082. Taking into account 57 years outstanding we approximated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 plus legals.
In 2009 we were contacted by Ms Holly Hall who, having completed a ground floor apartment in Westbourne in April 1995. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Comparable homes in Westbourne with a long lease were valued about £200,000. The mid-range amount of ground rent was £50 billed yearly. The lease ran out on 7 February 2102. Considering the 77 years unexpired we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.