Wirksworth residential property owned on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
The lawyers that we work with procure Wirksworth 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.
David owned a studio flat in Wirksworth being sold with a lease of just over 72 years outstanding. David on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were David to exercise his statutory right. David procured expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
In 2009 we were phoned by Mr and Mrs. O Dupont who, having bought a first floor flat in Wirksworth in November 2008. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Wirksworth with a long lease were in the region of £225,400. The mid-range ground rent payable was £45 invoiced yearly. The lease elapsed on 27 April 2090. Considering the 64 years outstanding we calculated the premium to the landlord for the lease extension to be within £15,200 and £17,600 not including fees.
Mrs F Turner acquired a basement flat in Wirksworth in July 2000. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Comparable residencies in Wirksworth with 100 year plus lease were valued about £270,000. The mid-range ground rent payable was £55 collected annually. The lease ran out in 2101. Given that there were 75 years unexpired we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including professional charges.