As the the remaining lease term of a Woodley residential lease decreases so does its value and therefore the value of your property. If the residual term has, beyond one hundred years remaining then this decrease may be of little impact however there will become a stage when a lease has under than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary reason why you should extend the lease sooner as opposed to later. Many flat owners in Woodley will qualify for this right; nevertheless a conveyancing solicitor can advise if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | 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. |
Using our service gives you better control over the value of your Woodley leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alex owned a studio flat in Woodley on the market with a lease of just over fifty eight years remaining. Alex informally approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Alex to exercise his statutory right. Alex procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
In 2014 we were e-mailed by Mr Sebastian Gómez who, having was assigned a lease of a studio flat in Woodley in March 1995. The dilemma was if we could approximate the price would be to extend the lease by a further 90 years. Identical flats in Woodley with an extended lease were valued about £246,800. The average ground rent payable was £60 invoiced per annum. The lease ended on 16 September 2075. Given that there were 50 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 not including fees.
Last Spring we were phoned by Mr and Mrs. B Cox , who moved into a purpose-built apartment in Woodley in April 2005. The question was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable flats in Woodley with a long lease were worth £208,200. The average amount of ground rent was £65 collected annually. The lease concluded on 18 August 2086. Considering the 61 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 not including costs.