Notting Hill leases on domestic deteriorating in value. if your lease has about 90 years left, you should start considering the need for a lease extension. If lease term is under eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Notting Hill will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to check your eligibility. In certain situations you may not be entitled. There are also strict deadlines and formalities to comply with once the process has started so it’s wise to be guided by a lawyer during the process.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Notting Hill 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 lawyer we work with provide it.
Harrison owned a studio flat in Notting Hill being sold with a lease of just over 72 years unexpired. Harrison on an informal basis contacted his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harrison to exercise his statutory right. Harrison procured expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
Dr C Laurent purchased a newly refurbished flat in Notting Hill in July 2004. The dilemma was if we could estimate the premium would be to prolong the lease by ninety years. Similar premises in Notting Hill with a long lease were worth £198,400. The mid-range ground rent payable was £65 invoiced monthly. The lease came to a finish on 2 November 2084. Given that there were 59 years left we approximated the premium to the landlord to extend the lease to be within £21,900 and £25,200 plus expenses.
An example of a Lease Extension case for a Notting Hill premises is 2 Grove House 95 Addison Road in October 2013. the Tribunal decided that the premium to bepaid for a new lease is £50,050. This case related to 1 flat. The unexpired residue of the current lease was 68.4 years.