The re-sale value of a leasehold property in Wheatley depends on how many years the lease has left to run. If it is close to or less than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension before buying. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that all matters can be addressed in advance of the 80 year threshold. Leasehold Reform legislation entitles Wheatley qualifying lessees to an additional term of ninety years on top of the unexpired term, at a peppercorn rent (zero ground rent). The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Wheatley,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Wheatley valuers.
Following lengthy negotiations with the freeholder of her two bedroom apartment in Wheatley, Emily commenced the lease extension process as the eighty year mark was fast advancing. The lease extension completed in January 2007. The freeholder’s costs were restricted to less than 650 GBP.
Last Summer we were approach by Dr M Torres , who owned a one bedroom apartment in Wheatley in January 2010. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Similar flats in Wheatley with an extended lease were worth £191,000. The mid-range ground rent payable was £65 invoiced quarterly. The lease expired in 2083. Taking into account 58 years left we estimated the compensation to the landlord to extend the lease to be within £23,800 and £27,400 plus legals.
In 2012 we were contacted by Mr and Mrs. B Stewart who, having took over the lease of a first floor apartment in Wheatley in September 1998. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Similar premises in Wheatley with a long lease were in the region of £250,000. The average amount of ground rent was £50 billed every twelve months. The lease came to a finish on 25 July 2094. Having 69 years outstanding we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including expenses.