With a domestic leasehold property in Woodford, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are fewer than 80 years left. Leasehold owners in Woodford with a lease nearing 81 years remaining should seriously think of extending it without delay. Once the lease term has below eighty years outstanding, under the current Act the landlord can calculate and charge a greater premium, based on a technical computation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with undertake Woodford 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.
Sam was the the leasehold proprietor of a studio flat in Woodford being marketed with a lease of fraction over 72 years outstanding. Sam informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Sam to invoke his statutory right. Sam obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Autumn we were contacted by Mrs L Davies , who moved into a one bedroom apartment in Woodford in February 1995. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative properties in Woodford with 100 year plus lease were in the region of £208,600. The mid-range amount of ground rent was £60 collected monthly. The lease end date was on 28 July 2083. Taking into account 57 years remaining we estimated the premium to the landlord for the lease extension to be between £30,400 and £35,200 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Woodford property is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The remaining number of years on the lease was 69.26 years.