There is no doubt about it a leasehold property in Euston is a wasting asset as a result of the shortening lease. Where the residual term has, beyond 125 years remaining then this decrease may be negligible nevertheless there will become a point in time when a lease has under than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary reason why you should extend the lease without delay. Many flat owners in Euston will qualify for this right; nevertheless a lawyer can confirm whether you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| 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 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Lease extensions in Euston can be a difficult process. We recommend you obtain guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Euston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Dexter, came seriously close to the eighty-year mark with the lease on his leasehold flat in Euston. Having bought his flat twenty years previously, the lease term was of minimal relevance. Luckily, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Dexter arranged for a lease extension at the eleventh hour last April. Dexter and the landlord who owned the flat above subsequently agreed on sum of £5,500 . If he had missed the deadline, the premium would have gone up by at least £900.
Last Winter we were phoned by Mrs Alicia Roberts , who acquired a one bedroom apartment in Euston in May 2009. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Comparative premises in Euston with 100 year plus lease were valued around £225,400. The average amount of ground rent was £45 invoiced annually. The lease lapsed on 25 May 2089. Taking into account 64 years unexpired we calculated the compensation to the landlord for the lease extension to be between £15,200 and £17,600 exclusive of professional charges.
Last Summer we were phoned by Mrs Naomi Johnson , who bought a one bedroom flat in Euston in April 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Comparative flats in Euston with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced annually. The lease ran out in 2100. Given that there were 75 years unexpired we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.