There is no doubt about it a leasehold property in Colliers Wood is a wasting asset as a result of the shortening lease. Where the residual term has, beyond 100 years remaining then this decrease may be negligible that being said there will become a point in time when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner rather than later. The majority of flat owners in Colliers Wood will qualify for this right; however a conveyancing solicitor can advise if you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with handle Colliers Wood lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Twenty four months ago Tommy, started to get close to the 80-year mark with the lease on his first floor flat in Colliers Wood. In buying his flat two decades ago, the length of the lease was of minimal significance. Luckily, he recognised he would imminently be paying an escalated premium for a lease extension. Tommy arranged for a lease extension just under the wire in July. Tommy and the freeholder ultimately settled on a premium of £5,500 . If the lease had gone to less than eighty years, the figure would have escalated by a minimum £1,050.
Dr S Miller purchased a one bedroom flat in Colliers Wood in January 2007. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical properties in Colliers Wood with an extended lease were worth £260,000. The average ground rent payable was £50 collected monthly. The lease elapsed in 2097. Taking into account 72 years outstanding we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.
An example of a Lease Extension matter before the tribunal for a Colliers Wood flat 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 unexpired term as at the valuation date was 62.94 years.