Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Wick. Inevitably, the term of lease left reduces over time. This is often ignored and only becomes a problem when the flat or house has to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Eligible leaseholders in Wick have the legal entitlement to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Please give careful attention before delaying your Wick lease extension. Holding off that expense now only increases the price you will eventually incur for a lease extension
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| 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. |
Lease extensions in Wick can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Wick lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Evan, started to get near to the 80-year mark with the lease on his one bedroom flat in Wick. Having bought his property twenty years ago, the length of the lease was of no significance. Luckily, he became aware that he would soon be paying way over the odds for Extending the lease. Evan was able to extend his lease at the eleventh hour in August. Evan and the freeholder eventually settled on the final figure of £6,000 . If he failed to meet the deadline, the premium would have increased by at least £950.
Dr Elijah Harris acquired a one bedroom apartment in Wick in March 2006. We are asked if we could estimate the premium could be to extend the lease by ninety years. Comparable flats in Wick with an extended lease were valued about £191,400. The mid-range amount of ground rent was £55 billed every twelve months. The lease finished in 2079. Having 54 years unexpired we calculated the premium to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of legals.
Last Christmas we were contacted by Dr C Peterson , who moved into a studio flat in Wick in April 1997. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Similar homes in Wick with an extended lease were worth £295,000. The average ground rent payable was £45 billed monthly. The lease ran out in 2099. Considering the 74 years as a residual term we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus costs.