Witham leases on domestic properties are gradually losing value. Where your lease has about ninety years remaining, you should start considering the need for a lease extension. An important point to note is that it is desirable for your lease extension to be in place before the term of the current lease drops below 80 years - otherwise a higher amount will be due. Flat owners in Witham will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check your eligibility. In some circumstances you may not qualify. There are prescribed deadlines and formalities to follow once the process has commenced so it’s wise to be guided by a conveyancing solicitor during the process.
Leasehold premises in Witham with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant 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 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; |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Witham 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 October Arthur, came perilously close to the eighty-year mark with the lease on his purpose- built flat in Witham. Having bought his flat 19 years previously, the unexpired term was of no concern. As luck would have it, he became aware that he needed to take action soon on a lease extension. Arthur was able to extend his lease just in the nick of time in July. Arthur and the freeholder via the managing agents ultimately agreed on an amount of £6,000 . If the lease had descended lower than eighty years, the figure would have become more costly by a minimum £875.
Last November we were called by Mr and Mrs. P Phillips , who moved into a one bedroom apartment in Witham in August 1995. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar flats in Witham with a long lease were in the region of £200,800. The mid-range amount of ground rent was £65 invoiced per annum. The lease lapsed in 2085. Taking into account 60 years left we estimated the premium to the landlord to extend the lease to be between £20,900 and £24,200 exclusive of fees.
In 2014 we were called by Ms A Lefèvre who, having moved into a first floor apartment in Witham in February 2011. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable properties in Witham with a long lease were in the region of £255,000. The average ground rent payable was £50 invoiced yearly. The lease lapsed on 15 June 2096. Given that there were 71 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.