It’s an underpublicised certainty that a Winchcombe residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Winchcombe property market.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Winchcombe will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in Winchcombe with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Winchcombe lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Off the back of unsuccessful correspondence with the freeholder of her two bedroom flat in Winchcombe, Zoe commenced the lease extension process as the 80 year mark was quickly coming. The lease extension was concluded in November 2007. The landlord’s costs were restricted to approximately 650 GBP.
In 2014 we were contacted by Dr Ella Wright who, having moved into a purpose-built flat in Winchcombe in September 2010. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable premises in Winchcombe with 100 year plus lease were worth £243,000. The average amount of ground rent was £65 invoiced per annum. The lease finished in 2088. Taking into account 63 years remaining we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus legals.
Last year we were contacted by Dr Y Ricardo , who completed a studio apartment in Winchcombe in April 2007. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Similar residencies in Winchcombe with a long lease were valued around £181,600. The mid-range amount of ground rent was £55 collected per annum. The lease ran out in 2077. Considering the 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including fees.