Earlsfield leases on residential properties are gradually losing 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. Legislation has been in place for sometime now which permits qualifying Earlsfield residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Earlsfield you really ought to check if your lease has between 70 and 90 years left. There are compelling reasons why a Earlsfield leaseholder with a lease having around eighty years left should take action to ensure that a lease extension is effected without delay
Leasehold residencies in Earlsfield with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you enhanced control over the value of your Earlsfield leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Harry, came precariously close to the eighty-year mark with the lease on his studio apartment in Earlsfield. Having purchased his flat two decades ago, the length of the lease was of no relevance. Thankfully, he became aware that he would imminently be paying an inflated amount for a lease extension. Harry was able to extend his lease just under the wire last September. Harry and the freeholder subsequently settled on sum of £5,000 . If the lease had dipped below 80 years, the figure would have gone up by at least £1,100.
In 2013 we were approached by Mrs H Martin who, having purchased a one bedroom apartment in Earlsfield in April 1999. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar flats in Earlsfield with a long lease were in the region of £198,800. The mid-range amount of ground rent was £55 collected every twelve months. The lease ran out on 9 November 2080. Having 55 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £33,300 and £38,400 not including fees.
An example of a Freehold Enfranchisement decision for a Earlsfield premises is 35 Trewint Street in February 2012. The Tribunal arrived at a premium of £32 425 for the freehold reversion. The matter was transferred back to the court for further consideration which required the applicants pay the premium (less any assessed costs) into court after which the court would execute a transfer of the freehold. This case was in relation to 2 flats. The remaining number of years on the lease was 70.57 years.