Colliers Wood leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Colliers Wood tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Colliers Wood you would be well advised to check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Irrespective of whether you are a tenant or a landlord in Colliers Wood,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Colliers Wood valuers.
In 2014 Kyle, came very close to the 80-year threshold with the lease on his studio apartment in Colliers Wood. In buying his property twenty years ago, the lease term was of little concern. by good luck, he became aware that he would soon be paying an escalated premium for a lease extension. Kyle was able to extend his lease just under the wire last August. Kyle and the freeholder via the management company eventually agreed on an amount of £5,500 . If he had missed the deadline, the price would have gone up by at least £950.
Mrs W Walker moved into a purpose-built flat in Colliers Wood in September 2002. The dilemma was if we could estimate the premium would be for a 90 year extension to my lease. Identical flats in Colliers Wood with an extended lease were in the region of £242,600. The average amount of ground rent was £45 collected every twelve months. The lease concluded on 25 April 2093. Given that there were 67 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 exclusive of legals.
An example of a Lease Extension decision for a Colliers Wood premises is 14 Nutwell Street in January 2014. The premium payable for the acquisition of a new lease of the subject premises was in the sum of £30,523 This case was in relation to 1 flat. The remaining number of years on the lease was 62.94 years.