It’s an underpublicised certainty that a Wootton residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Wootton property market.Once your lease gets to 85ish years, you should start considering a lease extension. If lease term slips below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Wootton will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
Leasehold residencies in Wootton with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 Wootton 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.
Dylan owned a conversion flat in Wootton being marketed with a lease of a few days over sixty years remaining. Dylan on an informal basis contacted his freeholder being a well known local-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 subject to a rise in the rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Dylan to invoke his statutory right. Dylan obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
In 2010 we were contacted by Mr Aarav Rose who, having acquired a studio apartment in Wootton in November 1998. The dilemma was if we could estimate the price would likely be to extend the lease by an additional years. Comparative premises in Wootton with an extended lease were in the region of £208,200. The average amount of ground rent was £65 invoiced quarterly. The lease ran out on 13 February 2086. Taking into account 61 years remaining we calculated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of expenses.
Dr George Adams purchased a studio apartment in Wootton in July 1998. The question was if we could approximate the premium would be to prolong the lease by a further 90 years. Comparable premises in Wootton with 100 year plus lease were valued about £260,000. The average amount of ground rent was £50 billed annually. The lease came to a finish in 2097. Having 72 years left we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.