It’s an underpublicised truth that a Queen's Park residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Queen's Park property market.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 dips under 80 years - otherwise a higher amount will be payable. The majority of flat owners in Queen's Park will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Queen's Park leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harvey was the the leasehold owner of a 2 bedroom apartment in Queen's Park being sold with a lease of fraction over sixty years outstanding. Harvey informally spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harvey to invoke his statutory right. Harvey obtained expert advice and secured satisfactory deal without going to tribunal and sell the flat.
In 2013 we were called by Mr and Mrs. S Bonnet who, having purchased a one bedroom apartment in Queen's Park in November 2012. We are asked if we could approximate the price would likely be to prolong the lease by ninety years. Comparable properties in Queen's Park with an extended lease were worth £227,800. The average ground rent payable was £45 collected monthly. The lease ran out on 27 July 2091. Having 65 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus costs.
An example of a Freehold Enfranchisement case for a Queen's Park property is 4 & 4A Charteris Road in June 2009. the Tribunal held that the price to be paid for the enfranchisement of 4/4a Charteris Road to be £15,510 for at 4and £15,694 for at 4a This case affected 2 flats. The unexpired lease term was 70.02 years.