For those whose Wheathampstead flat is held on a long lease, our message is clear – if nothing is done, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Chelsea 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. |
| 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. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Using our service will provide you enhanced control over the value of your Wheathampstead leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Evan owned a high value flat in Wheathampstead on the market with a lease of fraction over 59 years remaining. Evan informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Evan to exercise his statutory right. Evan procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
In 2012 we were contacted by Ms R Stewart who, having purchased a ground floor apartment in Wheathampstead in May 2006. The question was if we could approximate the price would be to prolong the lease by an additional years. Identical properties in Wheathampstead with 100 year plus lease were in the region of £191,400. The mid-range amount of ground rent was £55 billed every twelve months. The lease ended in 2079. Given that there were 54 years as a residual term we calculated the premium to the landlord to extend the lease to be within £34,200 and £39,600 exclusive of professional charges.
Ms H Brooks moved into a basement apartment in Wheathampstead in October 2004. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Similar premises in Wheathampstead with an extended lease were worth £295,000. The mid-range amount of ground rent was £45 billed per annum. The lease expired on 25 November 2099. Taking into account 74 years left we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.