The re-sale value of a leasehold property in Grove Park is impacted by how long the lease has left to run. If it is close to or less than 80 years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be addressed well before the eighty year threshold. Current legislation enables Grove Park qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Grove Park with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| 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; |
| 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. |
| Yorkshire 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. |
Retaining our service gives you better control over the value of your Grove Park leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Austin owned a high value flat in Grove Park on the market with a lease of fraction over 72 years remaining. Austin informally spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 per annum. No ground rent would be due on a lease extension were Austin to exercise his statutory right. Austin obtained expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Last Summer we were contacted by Dr Y González , who acquired a basement apartment in Grove Park in April 1996. The question was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar properties in Grove Park with a long lease were valued around £210,600. The average amount of ground rent was £45 collected per annum. The lease concluded in 2087. Having 62 years remaining we approximated the premium to the landlord to extend the lease to be within £18,100 and £20,800 plus expenses.
An example of a Lease Extension case for a Grove Park flat is 49 Woodstock Court Burnt Ash Hill in May 2012. the payment of £64,116 by the leaseholder was the premium which the Tribunal found due for the lease extension in this case. This case related to 1 flat. The unexpired term was 23.26 years.