Unfortunately that a Wokingham residential lease is a wasting asset. As the lease term reduces 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 Wokingham property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Wokingham will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold residencies in Wokingham with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 conveyancing solicitors that we work with procure Wokingham 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.
Half a year ago Leo, started to get near to the eighty-year threshold with the lease on his leasehold flat in Wokingham. In buying his home twenty years ago, the lease term was of little importance. Luckily, he realised he would soon be paying an escalated premium for a lease extension. Leo arranged for a lease extension at the eleventh hour last August. Leo and the landlord who owned the flat above ultimately settled on an amount of £5,000 . If he failed to meet the deadline, the amount would have escalated by at least £900.
Last July we were e-mailed by Mr and Mrs. P Martinez , who moved into a basement apartment in Wokingham in May 2007. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable flats in Wokingham with 100 year plus lease were worth £208,600. The mid-range ground rent payable was £60 collected quarterly. The lease came to a finish on 28 March 2082. Considering the 57 years outstanding we approximated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 exclusive of legals.
Mr and Mrs. J Scott bought a studio apartment in Wokingham in July 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Comparative homes in Wokingham with a long lease were worth £200,000. The average amount of ground rent was £50 collected quarterly. The lease lapsed in 2102. Given that there were 77 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of costs.