It’s a harsh truth that a Lisson Grove residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Lisson Grove property prices.Once your lease nears 85ish years, you should start considering 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 falls below 80 years - otherwise a higher premium will be payable. The majority of flat owners in Lisson Grove will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the premises will be worth the same as 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Lisson Grove 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 conveyancing solicitor we work with provide it.
Lewis owned a high value apartment in Lisson Grove being sold with a lease of fraction over fifty eight years remaining. Lewis on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Lewis to exercise his statutory right. Lewis procured expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
In 2011 we were contacted by Mr and Mrs. R White who, having purchased a garden flat in Lisson Grove in May 2006. We are asked if we could estimate the price would be for a ninety year extension to my lease. Comparative flats in Lisson Grove with an extended lease were worth £225,800. The mid-range ground rent payable was £60 collected yearly. The lease expired on 20 March 2085. Considering the 60 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £25,700 and £29,600 exclusive of professional charges.
An example of a Lease Extension decision for a Lisson Grove flat is Flats 37 & 39 88/90 Portland Place in December 2010. The Tribunal determined that the premium payable for the lease extensions in respect of these two flats is as follows:- For Flat 37, the sum of £385,230.00 For Flat 39, the sum of £436,780.00 This case related to 2 flats. The unexpired term as at the valuation date was 24.02 years.