Clerkenwell leases on residential properties are gradually decreasing in 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. Most owners of residential leasehold property in Clerkenwell enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Clerkenwell you really ought to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for many years in the future.
|Halifax|| Minimum 70 years from the date of the mortgage.|
|Lloyds TSB Scotland|| Mortgage term plus 30 years subject to an overall minimum term of 70 years|
|Nationwide Building Society|| Our minimum unexpired lease term is 55 years subject to at least 30 years remaining at the end of the mortgage term.|
Report to the issuing office if the lease term is shorter than that stated on the offer and has less than 100 years remaining. (There is no requirement to report if the lease term is lower than that stated on the offer but still has 100 years or more to run, or if the lease term is longer than that stated on the offer).
NEW BUILD PROPERTIES (includes office conversions)
The following are not acceptable:
- The unexpired lease term is less than 125 years on a new build flat or 250 years on a new build house (does not apply to Shared Ownership)
- Starting ground rent is more than 0.1% of the property value
The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed.
Ground rents and event fees:
Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
|Skipton Building Society|| 85 years from the date of completion 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. |
Irrespective of whether you are a tenant or a freeholder in Clerkenwell,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Clerkenwell valuers.
Lewis was the the leasehold proprietor of a studio flat in Clerkenwell being marketed with a lease of a little over fifty eight years unexpired. Lewis on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were Lewis to invoke his statutory right. Lewis procured expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Last Summer we were approach by Mrs Amy Brown , who took over the lease of a purpose-built flat in Clerkenwell in March 2008. The question was if we could estimate the price could be to extend the lease by a further 90 years. Similar premises in Clerkenwell with an extended lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected annually. The lease concluded on 9 February 2090. Taking into account 71 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.
An example of a Lease Extension decision for a Clerkenwell 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 number of years remaining on the existing lease(s) was 66.8 years.