Wolverley 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 your lease becomes more expensive. It is the case that most Wolverley tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Wolverley you would be well advised to investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold properties in Wolverley with in excess of 100 years remaining 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 circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Wolverley 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.
Half a year ago William, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Wolverley. Having bought his property 19 years previously, the unexpired term was of minimal bearing. Fortunately, he realised he would imminently be paying an escalated premium for a lease extension. William was able to extend his lease at the eleventh hour last September. William and the freeholder ultimately agreed on the final figure of £5,000 . If the lease had slipped lower than eighty years, the amount would have escalated by a minimum £975.
In 2009 we were contacted by Mr and Mrs. E Pérez who, having bought a purpose-built apartment in Wolverley in August 2008. We are asked if we could approximate the price would be to extend the lease by ninety years. Comparable homes in Wolverley with an extended lease were in the region of £223,400. The mid-range amount of ground rent was £60 invoiced per annum. The lease came to a finish on 20 March 2084. Taking into account 59 years unexpired we estimated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 not including expenses.
Last Autumn we were called by Ms Hollie Lewis , who completed a one bedroom flat in Wolverley in July 2007. We are asked if we could estimate the premium would be to extend the lease by ninety years. Comparative flats in Wolverley with a long lease were in the region of £205,000. The average ground rent payable was £50 invoiced annually. The lease elapsed in 2104. Having 79 years outstanding we estimated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of legals.