For anyone whose Westerham flat is held on a long lease, our message is clear – if no remedial action is taken, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Westerham with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire Building Society | 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. |
The conveyancers that we work with procure Westerham 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.
During the course of the last few months Oliver, started to get near to the 80-year mark with the lease on his leasehold apartment in Westerham. In buying his flat twenty years ago, the unexpired term was of minimal significance. Fortunately, he noticed he needed to take steps soon on Extending the lease. Oliver was able to extend his lease just under the wire last January. Oliver and the landlord eventually settled on a premium of £5,500 . If he not met the deadline, the price would have increased by a minimum £1,150.
Mr and Mrs. E Gómez acquired a first floor apartment in Westerham in April 2004. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar homes in Westerham with an extended lease were valued around £280,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease ran out on 4 July 2095. Taking into account 69 years unexpired we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.
Last Spring we were phoned by Mr and Mrs. U Martínez , who was assigned a lease of a garden flat in Westerham in October 1997. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable flats in Westerham with an extended lease were in the region of £216,000. The mid-range ground rent payable was £60 billed per annum. The lease ran out in 2084. Having 58 years unexpired we estimated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 not including costs.