Wythenshawe leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Wythenshawe tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Wythenshawe you really ought to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Wythenshawe with more than 100 years unexpired on the lease are sometimes regarded as a ‘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 buying 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | 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 |
| 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 Wythenshawe 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.
During the course of the last few months Harrison, came very near to the eighty-year mark with the lease on his two bedroom flat in Wythenshawe. In buying his flat 19 years ago, the unexpired term was of minimal interest. Fortunately, he recognised he would imminently be paying way over the odds for Extending the lease. Harrison arranged for a lease extension just ahead of time in May. Harrison and the freeholder via the managing agents subsequently agreed on the final figure of £5,000 . If the lease had gone to less than 80 years, the sum would have gone up by a minimum £1,050.
In 2012 we were e-mailed by Mr and Mrs. Y Brown who, having bought a purpose-built flat in Wythenshawe in November 1999. The question was if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Similar flats in Wythenshawe with a long lease were worth £227,800. The average ground rent payable was £45 billed quarterly. The lease lapsed in 2090. Given that there were 65 years unexpired we estimated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 not including professional charges.
In 2010 we were phoned by Mr Jude Morel who, having owned a one bedroom flat in Wythenshawe in July 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by ninety years. Similar properties in Wythenshawe with 100 year plus lease were valued around £275,000. The average amount of ground rent was £55 invoiced quarterly. The lease terminated in 2101. Given that there were 76 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.