Wimborne leases on domestic properties are gradually losing value. Where your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. It is important to recognise that it is that it is desirable for the lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher amount will be payable. Flat owners in Wimborne will usually qualify for a lease extension; however a solicitor should be able confirm your eligibility. In some circumstances you may not qualify. There are also strict timetables and steps to follow once the process is initiated so it’s wise to be guided by a conveyancer during the process.
It is generally accepted that a residential leasehold with more than one hundred 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 premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Retaining our service gives you increased control over the value of your Wimborne leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
John owned a 2 bedroom flat in Wimborne on the market with a lease of a few days over 59 years left. John informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were John to exercise his statutory right. John procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Mr and Mrs. L Clark owned a ground floor flat in Wimborne in February 2010. We are asked if we could approximate the price would likely be for a ninety year lease extension. Identical homes in Wimborne with 100 year plus lease were in the region of £257,800. The mid-range ground rent payable was £65 collected yearly. The lease lapsed in 2090. Having 65 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £17,100 and £19,800 plus fees.
Last Spring we were phoned by Mr and Mrs. L Mason , who purchased a one bedroom apartment in Wimborne in July 2006. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Identical homes in Wimborne with 100 year plus lease were valued about £191,400. The mid-range amount of ground rent was £55 invoiced yearly. The lease termination date was on 22 January 2079. Given that there were 54 years as a residual term we estimated the premium to the landlord for the lease extension to be within £34,200 and £39,600 exclusive of professional charges.