Hammersmith leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Hammersmith residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Hammersmith you really ought to check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Hammersmith with more than one hundred years remaining on the lease are often referred to as ‘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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Irrespective of whether you are a tenant or a landlord in Hammersmith,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hammersmith valuers.
Theo owned a conversion flat in Hammersmith being sold with a lease of fraction over sixty years outstanding. Theo informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Theo to exercise his statutory right. Theo procured expert advice and was able to make an informed decision and handle with the matter and sell the flat.
Last Christmas we were phoned by Dr Hugo Rose , who purchased a purpose-built flat in Hammersmith in September 2004. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative residencies in Hammersmith with a long lease were in the region of £181,200. The mid-range ground rent payable was £65 invoiced yearly. The lease concluded in 2081. Taking into account 56 years outstanding we calculated the premium to the landlord for the lease extension to be between £29,500 and £34,000 exclusive of fees.
An example of a Freehold Enfranchisement case for a Hammersmith premises is 19 Crisp Road in June 2009. Following a vesting order (Under section 26 of the Leasehold Reform,Housing and Urban Development Act 1993) The tribunal determined that the premium payable for the acquisition of the freehold was £33,756,apportioned as to£12,285 for the lower at and £21,471for the upper fat. This case related to 2 flats. The number of years remaining on the existing lease(s) was 68.32 years.