Wolston leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Wolston residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Wolston you really ought to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Wolston with more than 100 years outstanding 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 property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Wolston 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 conveyancer we work with provide it.
Subsequent to unsuccessful negotiations with the landlord of her first floor flat in Wolston, Elizabeth commenced the lease extension process as the eighty year threshold was quickly nearing. The legal work was concluded in May 2007. The landlord’s costs were kept to an absolute minimum.
In 2013 we were called by Mr and Mrs. E Girard who, having took over the lease of a basement flat in Wolston in September 2007. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Comparative homes in Wolston with an extended lease were worth £250,000. The mid-range amount of ground rent was £50 billed yearly. The lease finished in 2095. Taking into account 70 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
Mr and Mrs. N Michel owned a studio apartment in Wolston in May 2012. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Identical homes in Wolston with an extended lease were valued about £246,800. The average amount of ground rent was £60 billed per annum. The lease terminated in 2075. Considering the 50 years left we estimated the premium to the landlord to extend the lease to be between £44,700 and £51,600 not including professional charges.