Worcester leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Worcester tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Worcester you should see if your lease has between seventy and ninety years remaining. There are good reasons why a Worcester leaseholder with a lease having around 80 years left should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Retaining our service will provide you better control over the value of your Worcester leasehold, as your property will be more valuable and saleable 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.
Aarav was the the leasehold owner of a conversion flat in Worcester being marketed with a lease of just over 59 years outstanding. Aarav on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be payable on a lease extension were Aarav to exercise his statutory right. Aarav obtained expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Mr and Mrs. O Nguyen took over the lease of a basement flat in Worcester in August 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable residencies in Worcester with a long lease were worth £290,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease expiry date was in 2098. Taking into account 73 years remaining we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
Last year we were e-mailed by Mr and Mrs. S White , who moved into a purpose-built flat in Worcester in September 2010. The dilemma was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical properties in Worcester with an extended lease were in the region of £240,600. The mid-range amount of ground rent was £60 invoiced monthly. The lease concluded in 2087. Taking into account 62 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 plus expenses.