It’s a harsh truth that a Worsley residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Worsley property prices.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining slips below 80 years, you will end up paying 50% 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 Worsley will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Worsley,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Worsley valuers.
Ethan was the the leasehold proprietor of a 2 bedroom flat in Worsley being sold with a lease of a few days over fifty eight years unexpired. Ethan informally spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Ethan to invoke his statutory right. Ethan obtained expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Autumn we were e-mailed by Mr Eliot Brooks , who was assigned a lease of a basement apartment in Worsley in July 2002. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by 90 years. Similar flats in Worsley with 100 year plus lease were worth £174,200. The average amount of ground rent was £55 billed monthly. The lease elapsed on 19 April 2076. Given that there were 51 years left we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including professional charges.
Dr R Bernard was assigned a lease of a first floor apartment in Worsley in January 1996. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparable premises in Worsley with a long lease were valued about £285,000. The average ground rent payable was £45 collected annually. The lease terminated on 14 July 2096. Taking into account 71 years remaining we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including legals.