West Hampstead leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most West Hampstead tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in West Hampstead you must investigate if your lease has between 70 and 90 years remaining. There are compelling reasons why a West Hampstead flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you better control over the value of your West Hampstead leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Jude, started to get close to the eighty-year mark with the lease on his first floor flat in West Hampstead. Having purchased his flat two decades ago, the length of the lease was of little relevance. As luck would have it, he noticed he would imminently be paying an escalated premium for Extending the lease. Jude extended the lease just in the nick of time in June. Jude and the freeholder via the managing agents subsequently agreed on a premium of £5,500 . If the lease had gone to less than 80 years, the price would have increased by at least £1,150.
In 2013 we were e-mailed by Mr A Díaz who, having acquired a basement flat in West Hampstead in October 2003. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Similar properties in West Hampstead with a long lease were valued around £255,000. The average amount of ground rent was £50 billed yearly. The lease termination date was in 2094. Taking into account 70 years outstanding we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including fees.
An example of a Lease Extension decision for a West Hampstead residence 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.