Unfortunately that a Woburn residential lease is a wasting 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 reduction being disguised by increases in the Woburn property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term slips below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to 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 Woburn will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations 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 conveyancer for the duration of the process.
Leasehold residencies in Woburn with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start 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 conveyancing solicitors that we work with procure Woburn 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 lawyer we work with provide it.
In the wake of 6 months of unsuccessful correspondence with the freeholder of her two bedroom apartment in Woburn, Emily commenced the lease extension process just as her lease was nearing the all-important 80-year threshold. The legal work completed in August 2006. The freeholder’s costs were negotiated to less than 700 GBP.
Last Summer we were e-mailed by Dr Morgan Lee , who owned a basement flat in Woburn in May 2000. The question was if we could approximate the price would likely be for a 90 year lease extension. Comparable flats in Woburn with 100 year plus lease were in the region of £218,400. The average ground rent payable was £60 billed per annum. The lease lapsed on 26 May 2085. Given that there were 59 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 exclusive of professional charges.
Dr B Lefèvre moved into a one bedroom flat in Woburn in November 1996. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparative residencies in Woburn with a long lease were in the region of £205,000. The average ground rent payable was £50 collected every twelve months. The lease lapsed in 2105. Taking into account 79 years unexpired we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of expenses.