It’s an underpublicised truth that a Whittlesey 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 loss of value being disguised by increases in the Whittlesey property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under eighty years, you will end up paying 50% 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 additional value that a lease extension will add the property Most leasehold owners in Whittlesey 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 timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Whittlesey 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 the wake of 6 months of lengthy correspondence with the landlord of her two bedroom flat in Whittlesey, Maisie commenced the lease extension process just as the lease was approaching the critical eighty-year mark. The legal work completed in January 2006. The landlord’s charges were kept to an absolute minimum.
In 2012 we were approached by Mr V Phillips who, having took over the lease of a first floor apartment in Whittlesey in September 1999. We are asked if we could approximate the price could be to prolong the lease by an additional years. Comparable properties in Whittlesey with an extended lease were worth £257,800. The mid-range ground rent payable was £65 billed yearly. The lease expiry date was on 21 January 2091. Considering the 65 years remaining we calculated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 not including costs.
Dr J Vincent moved into a ground floor flat in Whittlesey in January 2009. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Similar properties in Whittlesey with an extended lease were valued around £191,400. The mid-range ground rent payable was £55 billed annually. The lease elapsed in 2080. Having 54 years remaining we estimated the premium to the freeholder to extend the lease to be within £34,200 and £39,600 exclusive of costs.