It’s a harsh certainty that a Fulham residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Fulham property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term slips below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to 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 flat owners in Fulham will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
Leasehold properties in Fulham with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Fulham,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Fulham valuers.
Ethan was the the leasehold owner of a conversion flat in Fulham on the market with a lease of a little over fifty eight years remaining. Ethan informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Ethan to exercise his statutory right. Ethan obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
In 2014 we were approached by Dr Ethan Petit who, having acquired a one bedroom apartment in Fulham in January 2009. We are asked if we could estimate the premium could be to extend the lease by 90 years. Identical properties in Fulham with a long lease were in the region of £245,000. The mid-range amount of ground rent was £50 billed per annum. The lease elapsed in 2094. Taking into account 68 years remaining we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus legals.
An example of a Freehold Enfranchisement case for a Fulham property is 66 and 66a Wardo Avenue in November 2012. The Tribunal determined that the sum of £8,048 is payable by the Applicants in respect of the price for the freehold of the property This case related to 2 flats. The remaining number of years on the lease was 93 years and 162 years.