It’s a harsh certainty that a Whitefield residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Whitefield property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Whitefield will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes 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 process.
Leasehold residencies in Whitefield with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Whitefield 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 conveyancer we work with provide it.
Last October Isaac, came precariously near to the eighty-year threshold with the lease on his first floor flat in Whitefield. In buying his property twenty years previously, the unexpired term was of no bearing. As luck would have it, he realised he needed to take steps soon on Extending the lease. Isaac extended the lease at the eleventh hour in August. Isaac and the freeholder via the managing agents eventually agreed on a premium of £6,000 . If the lease had dipped lower than 80 years, the price would have become more exhorbitant by at least £900.
Ms R Petit took over the lease of a garden apartment in Whitefield in March 2002. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by an additional years. Comparable properties in Whitefield with 100 year plus lease were worth £200,000. The average ground rent payable was £50 collected every twelve months. The lease termination date was in 2103. Considering the 77 years unexpired we calculated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
In 2013 we were contacted by Mr and Mrs. K Kelly who, having moved into a garden flat in Whitefield in October 1997. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparable flats in Whitefield with 100 year plus lease were valued around £260,200. The average ground rent payable was £65 invoiced yearly. The lease finished in 2092. Having 66 years remaining we calculated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of professional charges.