Winchelsea leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Winchelsea 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 Winchelsea you would be well advised to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Winchelsea with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Lease extensions in Winchelsea can be a difficult process. We recommend you obtain guidance from a conveyancer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Winchelsea lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Matthew, came perilously near to the eighty-year mark with the lease on his ground floor apartment in Winchelsea. In buying his property two decades ago, the length of the lease was of no importance. Luckily, he noticed he would soon be paying an escalated premium for Extending the lease. Matthew arranged for a lease extension just ahead of time in May. Matthew and the freeholder via the managing agents subsequently agreed on sum of £6,000 . If the lease had fallen to less than eighty years, the sum would have gone up by a minimum £1,025.
In 2009 we were approached by Mr Aiden Wright who, having was assigned a lease of a one bedroom flat in Winchelsea in January 2006. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative residencies in Winchelsea with an extended lease were valued about £300,000. The average ground rent payable was £50 invoiced every twelve months. The lease came to a finish in 2101. Considering the 76 years unexpired we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of expenses.
Last Summer we were e-mailed by Dr G Torres , who completed a studio apartment in Winchelsea in April 2008. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by an additional years. Comparable properties in Winchelsea with a long lease were in the region of £257,800. The mid-range amount of ground rent was £65 billed monthly. The lease came to a finish in 2090. Given that there were 65 years left we calculated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including professional charges.