Greenford leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Most owners of residential leasehold property in Greenford enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Greenford you must check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Greenford with in excess of one hundred years outstanding 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 purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | 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. |
The conveyancing solicitors that we work with handle Greenford 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.
Last year Owen, started to get near to the eighty-year threshold with the lease on his first floor flat in Greenford. In buying his property two decades ago, the unexpired term was of little interest. Thankfully, he recognised he would soon be paying an escalated premium for a lease extension. Owen extended the lease just in the nick of time in April. Owen and the landlord who owned the flat above ultimately agreed on sum of £6,000 . If the lease had descended to less than eighty years, the price would have escalated by at least £1,125.
Last Christmas we were contacted by Mr and Mrs. O Jones , who purchased a newly refurbished flat in Greenford in September 2010. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Identical residencies in Greenford with 100 year plus lease were valued about £225,400. The mid-range amount of ground rent was £45 invoiced yearly. The lease came to a finish on 10 September 2090. Considering the 64 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 not including legals.
An example of a lease Extension decision for a Greenford premises is 25 Beechwood Avenue in November 2012. the Tribunal accordingly determined that the premium for the lease extension should be £24,353. This case affected 1 flat. The unexpired residue of the current lease was 58.19 years.