Woodley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Woodley enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Woodley you must investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be worth the same as 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
Irrespective of whether you are a tenant or a freeholder in Woodley,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Woodley valuers.
Following lengthy negotiations with the freeholder of her basement apartment in Woodley, Leah started the lease extension process just as her lease was nearing the crucial 80-year threshold. The lease extension completed in August 2008. The freeholder’s costs were restricted to approximately 550 GBP.
Last Christmas we were called by Dr T Leroy , who owned a ground floor flat in Woodley in November 2003. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical properties in Woodley with a long lease were worth £166,400. The average amount of ground rent was £60 invoiced quarterly. The lease ended on 27 January 2078. Considering the 54 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £32,300 and £37,400 exclusive of expenses.
In 2010 we were phoned by Mr and Mrs. L Sánchez who, having was assigned a lease of a one bedroom apartment in Woodley in October 2010. The question was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparable homes in Woodley with a long lease were valued around £232,800. The mid-range ground rent payable was £45 invoiced yearly. The lease lapsed in 2089. Taking into account 65 years remaining we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including legals.