Unfortunately that a Wokingham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Wokingham property market.Where your lease has approximately 90 years left, you should start considering 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 lower than eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Wokingham will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Yorkshire 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. |
Using our service gives you better control over the value of your Wokingham leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Lucas owned a 2 bedroom flat in Wokingham being marketed with a lease of a little over 59 years left. Lucas on an informal basis contacted 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 subject to an increased rent to £200 annually. No ground rent would be payable on a lease extension were Lucas to invoke his statutory right. Lucas procured expert legal guidance and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Dr Seth Rogers was assigned a lease of a recently refurbished flat in Wokingham in May 2006. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar homes in Wokingham with an extended lease were valued around £295,000. The average amount of ground rent was £45 collected yearly. The lease elapsed on 17 May 2100. Given that there were 74 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus professional charges.
Mr and Mrs. U Rodríguez moved into a ground floor apartment in Wokingham in May 1999. The dilemma was if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Similar properties in Wokingham with a long lease were worth £243,000. The average ground rent payable was £65 collected annually. The lease elapsed in 2089. Considering the 63 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £20,000 and £23,000 plus professional charges.