For anyone whose Waltham Abbey property is held on a long lease, the message is clear – if nothing is done, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers that we work with undertake 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.
Aiden owned a 2 bedroom flat in Waltham Abbey being marketed with a lease of just over fifty eight years unexpired. Aiden informally approached his freeholder a well known local-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Aiden to invoke his statutory right. Aiden obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
In 2013 we were phoned by Ms Leah Jones who, having acquired a first floor flat in Waltham Abbey in November 2012. The dilemma was if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Identical homes in Waltham Abbey with a long lease were valued about £200,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease came to a finish on 13 October 2102. Having 77 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus 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 lease term was 69.26 years.