Wimborne leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Wimborne tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Wimborne you should check if your lease has between 70 and ninety years remaining. There are good reasons why a Wimborne flat owner with a lease having around 80 years unexpired should take action to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of one hundred 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 residence 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 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; |
| 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Retaining our service will provide you increased control over the value of your Wimborne leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Summer Thomas, came dangerously close to the eighty-year mark with the lease on his basement apartment in Wimborne. Having bought his property two decades ago, the lease term was of minimal importance. by good luck, he recognised he would soon be paying an inflated amount for Extending the lease. Thomas was able to extend his lease at the eleventh hour in August. Thomas and the landlord who owned the flat above subsequently agreed on the final figure of £5,500 . If he failed to meet the deadline, the price would have increased by a minimum £925.
Last Summer we were called by Dr A Wood , who acquired a one bedroom flat in Wimborne in July 1996. We are asked if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Similar premises in Wimborne with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 invoiced quarterly. The lease came to a finish on 17 November 2097. Having 72 years left we estimated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of costs.
Last Winter we were e-mailed by Mr and Mrs. O García , who moved into a one bedroom flat in Wimborne in June 2010. The question was if we could estimate the premium could be for a ninety year lease extension. Comparable properties in Wimborne with an extended lease were in the region of £233,200. The mid-range ground rent payable was £60 billed monthly. The lease ran out on 7 January 2086. Given that there were 61 years remaining we approximated the compensation to the freeholder to extend the lease to be within £22,800 and £26,400 plus fees.