For those whose Widnes property is held on a long lease, our message is clear – if nothing is done, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence 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; |
| Chelsea 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Widnes leasehold, as your property will be more valuable and saleable in terms of lease length should you wish 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.
After lengthy discussions with the freeholder of her purpose-built flat in Widnes, Louise initiated the lease extension process as the 80 year threshold was swiftly nearing. The transaction was finalised in January 2012. The freeholder’s costs were negotiated to approximately 450 pounds.
Mr and Mrs. T Rose bought a ground floor flat in Widnes in May 2011. The dilemma was if we could estimate the premium would likely be to extend the lease by a further 90 years. Similar premises in Widnes with a long lease were valued about £260,000. The mid-range ground rent payable was £50 collected yearly. The lease termination date was in 2096. Given that there were 71 years remaining we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.
Mr and Mrs. F Collins moved into a recently refurbished apartment in Widnes in September 1999. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Comparative properties in Widnes with a long lease were valued about £254,200. The average ground rent payable was £60 billed every twelve months. The lease lapsed on 23 March 2076. Given that there were 51 years unexpired we estimated the compensation to the landlord for the lease extension to be within £43,700 and £50,600 exclusive of expenses.