For those whose Wheathampstead flat is held on a long lease, the message is clear – if you ignore the situation, your property will eventually 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 extend the lease.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Wheathampstead leasehold, as your property will be more valuable and marketable in respect of 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.
During the course of the last few months Matthew, came seriously close to the eighty-year mark with the lease on his leasehold flat in Wheathampstead. Having purchased his flat 18 years previously, the lease term was of minimal importance. Luckily, he became aware that he would soon be paying an escalated premium for Extending the lease. Matthew extended the lease just in the nick of time in May. Matthew and the freeholder via the management company eventually agreed on sum of £5,000 . If the lease had slipped below 80 years, the figure would have gone up by at least £1,125.
Last Winter we were phoned by Dr Y Morel , who acquired a purpose-built flat in Wheathampstead in January 1995. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparative properties in Wheathampstead with an extended lease were valued about £260,200. The average amount of ground rent was £65 billed annually. The lease expired in 2092. Given that there were 66 years unexpired we approximated the premium to the landlord for the lease extension to be between £16,200 and £18,600 exclusive of legals.
Last month we were approach by Dr Ashleigh Torres , who moved into a newly refurbished flat in Wheathampstead in November 2002. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Comparative properties in Wheathampstead with a long lease were in the region of £198,800. The average amount of ground rent was £55 billed every twelve months. The lease came to a finish on 21 March 2081. Considering the 55 years outstanding we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 not including fees.