Euston leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Euston enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Euston you really ought to investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Euston leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Thomas owned a conversion apartment in Euston on the market with a lease of just over fifty eight years unexpired. Thomas informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Thomas to invoke his statutory right. Thomas obtained expert legal guidance and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Summer we were phoned by Ms T Petit , who was assigned a lease of a garden flat in Euston in March 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparable premises in Euston with an extended lease were valued around £183,600. The mid-range amount of ground rent was £65 invoiced per annum. The lease ran out on 16 June 2082. Taking into account 57 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 plus expenses.
In 2014 we were contacted by Dr Hugo Campbell who, having bought a ground floor flat in Euston in August 2006. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical premises in Euston with an extended lease were in the region of £245,000. The average amount of ground rent was £50 invoiced monthly. The lease end date was in 2093. Considering the 68 years remaining we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.