The re-sale value of a leasehold property in East Sheen is impacted by how many years the lease has remaining. If it is near to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be finalised in advance of the eighty year threshold. Leasehold Reform legislation entitles East Sheen qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in East Sheen with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle East Sheen 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.
Two years ago Harvey, came precariously close to the 80-year mark with the lease on his first floor flat in East Sheen. In buying his home two decades ago, the length of the lease was of minimal relevance. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Harvey extended the lease at the eleventh hour last June. Harvey and the landlord who owned the flat above subsequently settled on a premium of £5,000 . If he failed to meet the deadline, the sum would have become more costly by a minimum £875.
Last month we were phoned by Ms J Robinson , who was assigned a lease of a one bedroom flat in East Sheen in February 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparative flats in East Sheen with a long lease were valued around £255,000. The mid-range ground rent payable was £50 collected annually. The lease ran out on 24 August 2097. Given that there were 71 years outstanding we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.
An example of a Freehold Enfranchisement decision for a East Sheen residence is 19 St. Margarets Crescent in August 2010. the tribunal was of the view that the premium to be paid by the leaseholder for the freehold reversion was £51,983.00 This case was in relation to 3 flats. The unexpired term was 66.25 years.