Unfortunately that a Hammersmith residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Hammersmith property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Hammersmith will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. 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 conveyancing solicitor throughout the process.
It is generally considered that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Using our service gives you increased control over the value of your Hammersmith leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Teddy, started to get close to the 80-year threshold with the lease on his studio flat in Hammersmith. Having purchased his flat two decades ago, the unexpired term was of little significance. Fortunately, he realised he needed to take action soon on Extending the lease. Teddy was able to extend his lease just ahead of time in August. Teddy and the landlord eventually settled on the final figure of £6,000 . If he not met the deadline, the premium would have escalated by a minimum £1,125.
Last Winter we were phoned by Mr N Martinez , who acquired a garden apartment in Hammersmith in April 2007. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in Hammersmith with a long lease were in the region of £166,400. The average ground rent payable was £60 invoiced per annum. The lease concluded in 2078. Having 54 years remaining we approximated the compensation to the landlord for the lease extension to be within £32,300 and £37,400 plus professional charges.
An example of a Freehold Enfranchisement decision for a Hammersmith flat 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 affected 2 flats. The remaining number of years on the lease was 68.32 years.