It’s a harsh truth that a Witham residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Witham property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term slips under eighty 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 additional value that a lease extension will add the property Most leasehold owners in Witham will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Witham with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Lease extensions in Witham can be a difficult process. We recommend you get guidance from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Witham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Freddie owned a conversion flat in Witham being sold with a lease of just over 59 years left. Freddie on an informal basis contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Freddie to invoke his statutory right. Freddie procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
Dr Y Richardson moved into a one bedroom apartment in Witham in September 1997. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Comparative residencies in Witham with a long lease were valued around £191,000. The average amount of ground rent was £65 billed per annum. The lease ended in 2083. Considering the 58 years unexpired we estimated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 not including legals.
Last Spring we were phoned by Mr Reuben Bennett , who completed a one bedroom apartment in Witham in August 2001. We are asked if we could estimate the price would likely be for a ninety year lease extension. Similar premises in Witham with an extended lease were valued around £250,000. The mid-range amount of ground rent was £50 billed monthly. The lease finished on 25 February 2094. Having 69 years outstanding we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.