Unfortunately that a Woolwich 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 loss of value being disguised by increases in the Woolwich property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term dips under 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 additional value that a lease extension will add the property The majority of flat owners in Woolwich will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold residencies in Woolwich with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Using our service gives you better control over the value of your Woolwich leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Isaac, started to get near to the 80-year mark with the lease on his two bedroom flat in Woolwich. Having purchased his property 19 years ago, the length of the lease was of little bearing. As luck would have it, he recognised he would imminently be paying way over the odds for a lease extension. Isaac extended the lease just ahead of time last July. Isaac and the freeholder subsequently agreed on an amount of £5,500 . If the lease had gone below eighty years, the amount would have become more exhorbitant by a minimum £1,100.
Mr and Mrs. F Patel completed a purpose-built flat in Woolwich in January 2007. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Comparable properties in Woolwich with a long lease were in the region of £216,000. The average amount of ground rent was £60 invoiced per annum. The lease concluded in 2084. Considering the 58 years left we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 plus legals.
An example of a Lease Extension decision for a Woolwich property is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case related to 1 flat. The unexpired term as at the valuation date was 69.77 years.