Winchelsea leases on residential properties are gradually losing value. Where your lease has approximately 90 years remaining, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease falls below this level then you begin incurring an additional element called marriage value. Flat owners in Winchelsea will usually qualify for a lease extension; however a solicitor will check if you qualify. In some situations you may not qualify. There are also strict deadlines and steps to comply with once the process has commenced so it’s wise to be guided by a conveyancer during the process.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you enhanced control over the value of your Winchelsea leasehold, as your property will be more valuable and marketable in respect 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.
Joseph was the the leasehold proprietor of a 2 bedroom flat in Winchelsea being sold with a lease of a few days over 59 years unexpired. Joseph on an informal basis approached his landlord a well known local-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Joseph to exercise his statutory right. Joseph procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
Dr Isabelle García owned a garden apartment in Winchelsea in April 2010. We are asked if we could estimate the price could be to prolong the lease by a further 90 years. Comparative residencies in Winchelsea with an extended lease were worth £210,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease lapsed in 2105. Taking into account 80 years remaining we calculated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
In 2010 we were e-mailed by Ms S Ramírez who, having acquired a garden flat in Winchelsea in January 1996. We are asked if we could estimate the premium could be to extend the lease by 90 years. Comparable properties in Winchelsea with 100 year plus lease were in the region of £275,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease terminated on 18 March 2094. Considering the 69 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including professional charges.