When it comes to long leasehold property in Wolverley, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than eighty years left. Anyone in Wolverley with a lease nearing 81 years left should seriously consider extending it without delay. Once a lease has less than eighty years outstanding, under the current Act the freeholder can calculate and demand a larger premium, based on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure 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 conveyancing solicitor we work with provide it.
James owned a 2 bedroom apartment in Wolverley on the market with a lease of a few days over 59 years remaining. James on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were James to invoke his statutory right. James procured expert advice and secured an acceptable deal informally and sell the property.
Mr and Mrs. J Simon purchased a first floor flat in Wolverley in May 2009. The dilemma was if we could approximate the price would be to prolong the lease by 90 years. Comparable properties in Wolverley with an extended lease were in the region of £275,000. The mid-range amount of ground rent was £45 invoiced annually. The lease came to a finish in 2095. Having 69 years outstanding we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
Ms Gemma Mitchell owned a one bedroom apartment in Wolverley in February 1995. We are asked if we could estimate the price would be to prolong the lease by ninety years. Comparative premises in Wolverley with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 invoiced annually. The lease ran out in 2084. Considering the 58 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 plus fees.