The value of West Smithfield leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the remaining term is less than eighty years
Leasehold premises in West Smithfield with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 gives you increased control over the value of your West Smithfield leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Isaac owned a conversion apartment in West Smithfield being sold with a lease of fraction over sixty years outstanding. Isaac on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2011 we were contacted by Mr and Mrs. S Fournier who, having owned a one bedroom flat in West Smithfield in November 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Identical homes in West Smithfield with a long lease were in the region of £210,000. The mid-range amount of ground rent was £50 invoiced annually. The lease expiry date was in 2105. Having 80 years remaining we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.
An example of a Lease Extension case for a West Smithfield flat is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case was in relation to 1 flat. The unexpired residue of the current lease was 66.8 years.