When it comes to residential leasehold property in Smithfield, you effectively rent it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater notably once there are fewer than 80 years left. Residents in Smithfield with a lease nearing 81 years unexpired should seriously think of extending it as soon as possible. When the lease term has under eighty years remaining, under the current statute the freeholder is entitled to calculate and charge a larger amount, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold residencies in Smithfield with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Smithfield leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy discussions with the freeholder of her purpose-built apartment in Smithfield, Ella commenced the lease extension process as the eighty year mark was quickly approaching. The transaction was concluded in May 2011. The freeholder’s costs were negotiated to about four hundred pounds.
Last Spring we were called by Mrs Lauren Smith , who acquired a one bedroom apartment in Smithfield in April 2010. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Comparable homes in Smithfield with a long lease were in the region of £174,200. The mid-range amount of ground rent was £55 collected yearly. The lease terminated on 14 November 2076. Given that there were 51 years left we calculated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 not including professional charges.
In 2014 we were approached by Dr Henry Pérez who, having purchased a first floor apartment in Smithfield in March 2005. The question was if we could approximate the price could be for a ninety year extension to my lease. Identical properties in Smithfield with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 billed quarterly. The lease concluded in 2096. Given that there were 71 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of costs.