The market value of Woburn leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the unexpired lease term is less than 80 years
Leasehold premises in Woburn with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you better control over the value of your Woburn leasehold, as your property will be more valuable and saleable in terms 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.
In 2014 Alfie, started to get close to the 80-year threshold with the lease on his first floor flat in Woburn. Having bought his flat two decades ago, the length of the lease was of minimal concern. by good luck, he realised he would imminently be paying an escalated premium for a lease extension. Alfie arranged for a lease extension just in the nick of time in September. Alfie and the freeholder ultimately agreed on the final figure of £5,500 . If the lease had slid to less than eighty years, the price would have gone up by at least £1,075.
Last month we were called by Dr E Kelly , who owned a basement apartment in Woburn in October 2007. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Identical premises in Woburn with an extended lease were valued around £201,200. The mid-range ground rent payable was £55 collected quarterly. The lease came to a finish in 2081. Considering the 56 years remaining we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 exclusive of fees.
Mr N Edwards moved into a first floor flat in Woburn in July 1995. The question was if we could estimate the premium would be to prolong the lease by ninety years. Similar premises in Woburn with a long lease were valued about £300,000. The mid-range amount of ground rent was £50 billed per annum. The lease lapsed in 2101. Having 76 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.