It’s a harsh truth that a Waltham Abbey 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 depreciation being disguised by increases in the Waltham Abbey property market.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay half 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 Most leasehold owners in Waltham Abbey will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Waltham Abbey with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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 |
The conveyancing solicitors that we work with handle Waltham Abbey 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 conveyancer we work with provide it.
Twenty four months ago Matthew, started to get close to the eighty-year mark with the lease on his ground floor apartment in Waltham Abbey. Having purchased his flat two decades ago, the length of the lease was of no relevance. Thankfully, he became aware that he would imminently be paying an inflated amount for Extending the lease. Matthew arranged for a lease extension just ahead of time last March. Matthew and the landlord who owned the flat above ultimately agreed on an amount of £5,500 . If the lease had fallen to less than 80 years, the sum would have escalated by at least £1,100.
In 2009 we were approached by Dr Harrison David who, having bought a newly refurbished apartment in Waltham Abbey in July 2010. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Identical flats in Waltham Abbey with 100 year plus lease were worth £208,600. The average amount of ground rent was £60 billed monthly. The lease lapsed in 2083. Having 57 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 exclusive of expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Waltham Abbey residence is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The unexpired residue of the current lease was 69.26 years.