Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Woodbury. Clearly, the length of lease remaining shortens as time goes by. This may slip by relatively unnoticed when the flat or house needs to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Woodbury have the right to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Do give careful consideration before delaying your Woodbury lease extension. Putting off the cost now simply increases the price you will ultimately have to pay to extend your lease
It is generally accepted that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Woodbury leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Theo, came critically close to the eighty-year mark with the lease on his studio apartment in Woodbury. Having bought his flat twenty years previously, the unexpired term was of no significance. Luckily, he realised he would imminently be paying an escalated premium for a lease extension. Theo extended the lease just under the wire in June. Theo and the landlord who owned the flat above ultimately agreed on the final figure of £5,500 . If the lease had gone below 80 years, the premium would have increased by a minimum £950.
In 2013 we were contacted by Ms Natasha Mercier who, having owned a newly refurbished apartment in Woodbury in April 2000. The question was if we could estimate the price could be to prolong the lease by a further 90 years. Comparative homes in Woodbury with a long lease were in the region of £181,600. The average amount of ground rent was £55 billed annually. The lease ended in 2077. Given that there were 52 years left we approximated the premium to the landlord to extend the lease to be between £30,400 and £35,200 plus legals.
Ms Amber Petit bought a newly refurbished apartment in Woodbury in March 1997. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Similar homes in Woodbury with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease ended in 2097. Having 72 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.