It’s an underpublicised certainty that a Winterton residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Winterton property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Winterton will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service gives you better control over the value of your Winterton leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Alex, came very close to the eighty-year threshold with the lease on his one bedroom flat in Winterton. Having bought his flat 19 years ago, the unexpired term was of no bearing. Luckily, he recognised he would soon be paying an inflated amount for a lease extension. Alex was able to extend his lease just in the nick of time in April. Alex and the freeholder via the management company ultimately settled on a premium of £5,000 . If the lease had dropped lower than 80 years, the price would have gone up by a minimum £875.
Mr and Mrs. O Sharif was assigned a lease of a one bedroom apartment in Winterton in November 2008. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparative premises in Winterton with a long lease were in the region of £166,400. The mid-range amount of ground rent was £60 invoiced monthly. The lease termination date was on 21 May 2080. Considering the 54 years as a residual term we approximated the premium to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of fees.
Last Spring we were approach by Mr and Mrs. G Wood , who moved into a one bedroom apartment in Winterton in October 1998. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative properties in Winterton with 100 year plus lease were in the region of £227,800. The average ground rent payable was £45 billed monthly. The lease expired in 2091. Having 65 years outstanding we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus costs.