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Main reasons to start your Wickford lease extension


Top reasons for lease extension now:

A Wickford lease depreciates with the years remaining on the lease.

On the balance of probabilities where you own a flat in Wickford you actually own a long leasehold interest over your property

An extended lease has roughly the same value as a freehold

Leasehold properties in Wickford with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘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 purchasing the reversionary interest unless savings on ground rent and service charges merit it.

Banks and Building Societies may not issue a mortgage on a short lease

Most banks and building societies require a lengthy amount of time left on a leasehold residence before they will contemplate it as adequate security. Regardless of whether you need a mortgage, you should bear in mind that it is reasonable to assume that someone intending to buy your property in the future might well do, so if they are unable to get a mortgage, then the value of your property will likely be adversely impacted. In the last decade many banks and building societies have increased the required minimum lease length that they are willing to lend on

Lender Requirement
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Halifax Minimum 70 years from the date of the mortgage.
Leeds Building Society 85 years remaing from the start of the mortgage.
Lloyds TSB Scotland Mortgage term plus 30 years subject to an overall minimum term of 70 years
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

Why use us for your lease extension in Wickford?

Retaining our service will provide you better control over the value of your Wickford leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.

Wickford Lease Extension Case Summaries:

Oliver, Wickford, Essex

Last October Oliver, came perilously close to the eighty-year mark with the lease on his one bedroom apartment in Wickford. Having bought his flat twenty years previously, the lease term was of no concern. As luck would have it, he noticed he needed to take action soon on Extending the lease. Oliver was able to extend his lease just in the nick of time last March. Oliver and the landlord subsequently agreed on a premium of £6,000 . If he failed to meet the deadline, the amount would have increased by at least £975.

Wickford case:

Last month we were contacted by Dr Zoe Rivera , who moved into a garden apartment in Wickford in June 2001. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Comparable premises in Wickford with an extended lease were valued around £223,400. The average amount of ground rent was £60 billed annually. The lease came to a finish in 2081. Having 59 years left we estimated the compensation to the landlord for the lease extension to be between £27,600 and £31,800 exclusive of professional charges.

Wickford case:

In 2009 we were called by Mr and Mrs. I Ali who, having bought a first floor flat in Wickford in April 2005. We are asked if we could estimate the price could be for a ninety year lease extension. Comparable flats in Wickford with a long lease were valued about £205,000. The average amount of ground rent was £50 collected yearly. The lease ended in 2101. Given that there were 79 years left we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including professional charges.