Wolverhampton residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
Leasehold properties in Wolverhampton with over one hundred years left on the lease are often regarded as a ‘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 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; |
| 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. |
| Halifax | Minimum 70 years from the date 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. |
Regardless of whether you are a tenant or a landlord in Wolverhampton,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Wolverhampton valuers.
Half a year ago Max, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Wolverhampton. Having purchased his flat 19 years previously, the lease term was of little importance. by good luck, he noticed he would imminently be paying an inflated amount for Extending the lease. Max extended the lease at the eleventh hour last June. Max and the landlord ultimately settled on the final figure of £6,000 . If the lease had descended to less than eighty years, the price would have become more costly by a minimum £975.
In 2010 we were e-mailed by Mrs M Rivera who, having acquired a basement apartment in Wolverhampton in March 2011. We are asked if we could approximate the price would be to extend the lease by an additional years. Identical flats in Wolverhampton with a long lease were in the region of £275,000. The average amount of ground rent was £55 invoiced annually. The lease expired on 1 June 2102. Having 77 years remaining we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.
In 2014 we were phoned by Dr Muhammad Wood who, having acquired a first floor apartment in Wolverhampton in August 2012. The question was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Similar residencies in Wolverhampton with a long lease were worth £183,600. The mid-range ground rent payable was £65 billed yearly. The lease expired in 2082. Taking into account 57 years as a residual term we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.