Smithfield leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Most owners of residential leasehold property in Smithfield enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Smithfield you must investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Retaining our service gives you better control over the value of your Smithfield leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy discussions with the freeholder of her first floor apartment in Smithfield, Amy initiated the lease extension process as the eighty year deadline was rapidly advancing. The legal work was finalised in February 2011. The landlord’s charges were kept to an absolute minimum.
Dr J Williams purchased a purpose-built apartment in Smithfield in October 2011. We are asked if we could estimate the price could be for a 90 year lease extension. Similar homes in Smithfield with a long lease were valued around £243,000. The average ground rent payable was £65 collected yearly. The lease finished on 28 November 2088. Having 63 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £20,000 and £23,000 not including fees.
Last Summer we were called by Mr and Mrs. F Allen , who acquired a purpose-built apartment in Smithfield in August 2003. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Identical flats in Smithfield with 100 year plus lease were worth £181,600. The mid-range ground rent payable was £55 invoiced monthly. The lease terminated in 2077. Considering the 52 years remaining we estimated the premium to the landlord for the lease extension to be between £30,400 and £35,200 plus expenses.