With a long leasehold premises in Winterbourne, you effectively rent it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater notably once there are less than eighty years left. Residents in Winterbourne with a lease nearing 81 years left should seriously think of extending it without delay. Once a lease has fewer than eighty years outstanding, under the relevant legislation the freeholder is entitled to calculate and charge a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
| 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 Winterbourne 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.
Last year Isaac, started to get close to the eighty-year threshold with the lease on his leasehold apartment in Winterbourne. Having bought his home 19 years ago, the lease term was of no relevance. As luck would have it, he recognised he needed to take action soon on Extending the lease. Isaac extended the lease just under the wire in January. Isaac and the freeholder via the managing agents in the end settled on a premium of £5,000 . If the lease had descended below eighty years, the figure would have gone up by a minimum £875.
Last Christmas we were called by Ms P Baker , who took over the lease of a first floor apartment in Winterbourne in March 2005. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparative residencies in Winterbourne with a long lease were worth £208,600. The mid-range ground rent payable was £60 billed annually. The lease came to a finish on 21 March 2082. Taking into account 57 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 not including expenses.
In 2013 we were approached by Mr Liam Bernard who, having took over the lease of a studio flat in Winterbourne in June 2007. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar flats in Winterbourne with an extended lease were valued around £200,000. The mid-range ground rent payable was £50 collected quarterly. The lease terminated on 20 May 2102. Having 77 years unexpired we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of expenses.