Whitland leases on residential properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start considering the need for a lease extension. It is important to recognise that it is that it is desirable for a lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be payable. Leasehold owners in Whitland will mostly qualify for a lease extension; however a solicitor should be able check if you qualify. In certain circumstances you may not be entitled. There are also strict deadlines and steps to follow once the process has started so it’s best to be guided by a conveyancer during the process.
Leasehold properties in Whitland with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Whitland,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Whitland valuers.
16 months ago Kian, came critically close to the 80-year mark with the lease on his one bedroom flat in Whitland. Having bought his flat 18 years previously, the lease term was of no concern. Luckily, he recognised he would imminently be paying way over the odds for Extending the lease. Kian was able to extend his lease just ahead of time in May. Kian and the landlord who owned the flat above ultimately agreed on the final figure of £5,500 . If he had missed the deadline, the price would have increased by at least £1,150.
Mrs Paige Nelson bought a one bedroom apartment in Whitland in October 2000. The question was if we could estimate the price would likely be to extend the lease by a further 90 years. Identical properties in Whitland with 100 year plus lease were valued around £210,000. The average ground rent payable was £50 billed every twelve months. The lease termination date was in 2103. Given that there were 80 years left we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 not including expenses.
In 2012 we were called by Mrs Courtney Alexander who, having acquired a basement apartment in Whitland in February 2002. The dilemma was if we could estimate the premium would likely be to prolong the lease by an additional years. Comparative flats in Whitland with an extended lease were valued about £275,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease expired in 2092. Taking into account 69 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.