With a long leasehold premises in Wombourne, you effectively rent it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably once there are fewer than eighty years remaining. Anyone in Wombourne with a lease drawing near to 81 years left should seriously consider extending it without delay. When the lease term has under 80 years remaining, under the relevant legislation the freeholder is entitled to calculate and charge a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold residencies in Wombourne with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Wombourne 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 lawyer we work with provide it.
Subsequent to lengthy discussions with the landlord of her purpose-built flat in Wombourne, Catherine initiated the lease extension process as the 80 year mark was fast approaching. The legal work completed in August 2015. The landlord’s charges were kept to an absolute minimum.
In 2014 we were e-mailed by Mrs L Cooper who, having owned a one bedroom flat in Wombourne in January 2003. The question was if we could approximate the premium would be to extend the lease by 90 years. Similar properties in Wombourne with an extended lease were in the region of £237,600. The average ground rent payable was £45 invoiced annually. The lease terminated in 2092. Given that there were 67 years as a residual term we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of expenses.
In 2014 we were approached by Mr and Mrs. L Clarke who, having owned a recently refurbished apartment in Wombourne in June 2011. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Similar flats in Wombourne with 100 year plus lease were worth £280,000. The mid-range amount of ground rent was £55 collected yearly. The lease came to a finish on 9 February 2103. Given that there were 78 years remaining we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of professional charges.