Hampstead leases on residential properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease dips below this level then you start paying an additional element called marriage value. Flat owners in Hampstead will mostly be legally entitled to a lease extension; however a solicitor should be able check your eligibility. In some circumstances you may not qualify. There are also strict timetables and steps to follow once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you increased control over the value of your Hampstead leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy negotiations with the freeholder of her two bedroom flat in Hampstead, Elizabeth commenced the lease extension process as the 80 year mark was rapidly coming. The legal work was concluded in March 2005. The freeholder’s costs were negotiated to below 450 GBP.
In 2009 we were contacted by Ms Rhiannon Lambert who, having took over the lease of a first floor apartment in Hampstead in April 2009. The question was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Hampstead with an extended lease were worth £250,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease end date was on 13 July 2094. Taking into account 69 years left we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.
An example of a Lease Extension case for a Hampstead premises is Raised Ground Floor Flat 20 Fitzjohns Avenue in July 2014. the Tribunal decided that the premiums to be paid for new leases in respect of the Raised Ground Floor Flat and the First Floor Flat were to be calculated as: Raised Ground Floor: £765,175.14 First Floor: £601,617.77 This case affected 2 flats. The number of years remaining on the existing lease(s) was 16.83 and 16.43.