Windlesham 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 the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Windlesham residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Windlesham you should see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Windlesham with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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 are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Windlesham 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 lawyer we work with provide it.
During the course of the last few months Gabriel, started to get near to the 80-year threshold with the lease on his leasehold flat in Windlesham. Having bought his flat two decades ago, the lease term was of minimal interest. As luck would have it, he became aware that he would imminently be paying way over the odds for Extending the lease. Gabriel extended the lease just ahead of time in September. Gabriel and the freeholder via the management company eventually settled on sum of £5,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £875.
In 2013 we were e-mailed by Dr D Jones who, having owned a one bedroom flat in Windlesham in August 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative properties in Windlesham with 100 year plus lease were valued around £249,200. The average amount of ground rent was £60 collected annually. The lease concluded on 6 April 2077. Considering the 51 years left we approximated the premium to the landlord to extend the lease to be within £43,700 and £50,600 exclusive of professional charges.
Mr and Mrs. T Stewart completed a one bedroom apartment in Windlesham in April 2001. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Comparable properties in Windlesham with 100 year plus lease were valued about £210,600. The mid-range ground rent payable was £65 invoiced yearly. The lease terminated in 2088. Given that there were 62 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 not including legals.