Unfortunately that a Acton residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Acton property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Acton will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Retaining our service will provide you better control over the value of your Acton leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Dexter was the the leasehold owner of a studio flat in Acton being sold with a lease of fraction over 72 years left. Dexter on an informal basis approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dexter to exercise his statutory right. Dexter obtained expert advice and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Ms Abigail Johnson acquired a first floor flat in Acton in September 2011. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Comparative premises in Acton with an extended lease were in the region of £250,000. The average amount of ground rent was £50 invoiced yearly. The lease finished on 20 May 2095. Taking into account 69 years unexpired we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Acton flat is 4 Woodhurst Road in July 2013. The Tribunals valuation for the premium to be paid in respect of the collective enfranchisement was £51,050. This case affected 2 flats. The unexpired residue of the current lease was 63.75 years.