Greenwich residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a period of years.
It is generally considered that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
Lender | Requirement |
---|---|
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. |
Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
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. |
Using our service will provide you enhanced control over the value of your Greenwich leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Oscar was the the leasehold owner of a 2 bedroom apartment in Greenwich being marketed with a lease of fraction over 61 years remaining. Oscar on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Oscar to exercise his statutory right. Oscar obtained expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2011 we were called by Dr O Hall who, having moved into a purpose-built apartment in Greenwich in May 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Comparative residencies in Greenwich with a long lease were valued around £176,200. The average ground rent payable was £65 invoiced quarterly. The lease elapsed in 2080. Taking into account 56 years left we calculated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Greenwich premises is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case affected 2 flats. The unexpired lease term was 72 years.