It’s an underpublicised truth that a Wick residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Wick property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If lease term falls under 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Wick will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations 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 throughout the formalities.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 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. |
Retaining our service will provide you increased control over the value of your Wick leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Toby was the the leasehold proprietor of a conversion flat in Wick being sold with a lease of just over 59 years left. Toby informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Toby to invoke his statutory right. Toby procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Ms Nicole Collins bought a purpose-built apartment in Wick in March 2012. The question was if we could estimate the price could be to extend the lease by a further 90 years. Identical premises in Wick with an extended lease were in the region of £201,200. The average amount of ground rent was £55 billed per annum. The lease elapsed on 26 September 2082. Taking into account 56 years remaining we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 not including expenses.
Dr Jasmine Rose purchased a newly refurbished flat in Wick in October 2010. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparable properties in Wick with an extended lease were worth £300,000. The average ground rent payable was £50 collected quarterly. The lease expired on 13 March 2102. Considering the 76 years remaining we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including costs.