Unfortunately that a Wheatley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Wheatley property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher amount will be payable. Most flat owners in Wheatley will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 conveyancing solicitors that we work with handle Wheatley 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.
In recent months George, came perilously close to the 80-year mark with the lease on his studio flat in Wheatley. In buying his flat two decades ago, the lease term was of no interest. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. George extended the lease at the eleventh hour last March. George and the freeholder via the managing agents in the end settled on an amount of £5,000 . If the lease had slipped below eighty years, the premium would have gone up by a minimum £1,075.
In 2013 we were e-mailed by Dr Natalie Ali who, having bought a first floor apartment in Wheatley in March 2003. The dilemma was if we could estimate the price would be for a ninety year lease extension. Similar flats in Wheatley with 100 year plus lease were in the region of £200,800. The average amount of ground rent was £65 invoiced quarterly. The lease ran out in 2086. Taking into account 60 years unexpired we calculated the premium to the landlord for the lease extension to be within £20,900 and £24,200 not including professional charges.
Dr F Díaz moved into a garden flat in Wheatley in June 2008. We are asked if we could estimate the price would be for a 90 year extension to my lease. Identical flats in Wheatley with an extended lease were valued about £255,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease expired on 22 February 2097. Taking into account 71 years unexpired we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.