It’s an underpublicised truth that a Writtle residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Writtle property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher premium will be payable. Most flat owners in Writtle will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Writtle with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Writtle leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Freddie was the the leasehold owner of a 2 bedroom apartment in Writtle being sold with a lease of fraction over sixty years unexpired. Freddie informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to grant 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 increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Freddie to exercise his statutory right. Freddie procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
In 2013 we were called by Dr Andrew Allen who, having bought a one bedroom apartment in Writtle in February 1995. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Comparable properties in Writtle with 100 year plus lease were in the region of £254,200. The mid-range ground rent payable was £60 invoiced yearly. The lease elapsed in 2076. Given that there were 51 years remaining we calculated the premium to the landlord for the lease extension to be between £43,700 and £50,600 plus costs.
In 2014 we were phoned by Mrs Samantha Watson who, having acquired a garden flat in Writtle in October 2012. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Similar residencies in Writtle with a long lease were in the region of £210,600. The average ground rent payable was £45 collected quarterly. The lease terminated in 2087. Taking into account 62 years left we calculated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 not including fees.