It’s a harsh truth that a West Hampstead residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the West Hampstead property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining falls below 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in West Hampstead will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold properties in West Hampstead with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in West Hampstead,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with West Hampstead valuers.
Oliver owned a studio flat in West Hampstead on the market with a lease of just over 61 years left. Oliver on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Oliver to exercise his statutory right. Oliver procured expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
Last year we were phoned by Mrs E García , who took over the lease of a ground floor flat in West Hampstead in September 2008. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative flats in West Hampstead with a long lease were valued about £290,000. The average ground rent payable was £55 collected per annum. The lease expired in 2106. Taking into account 80 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus professional charges.
An example of a Lease Extension case for a West Hampstead premises is Flat A 372 Cricklewood Lane in January 2013. The Tribunal decided that the premium for the extended lease should be £5,750.00 and that the terms of the new lease should be those set out in annex to the decsion This case related to 1 flat.