For those whose Gunnersbury property is held on a long lease, the message is clear – if you ignore the situation, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with handle Gunnersbury 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 lawyer we work with provide it.
Subsequent to protracted negotiations with the landlord of her first floor flat in Gunnersbury, Emily commenced the lease extension process just as her lease was coming close to the critical 80-year threshold. The legal work was concluded in July 2013. The freeholder’s charges were kept to an absolute minimum.
In 2014 we were approached by Dr F Fournier who, having moved into a studio flat in Gunnersbury in November 1995. The dilemma was if we could estimate the price would be to extend the lease by 90 years. Identical homes in Gunnersbury with an extended lease were in the region of £264,000. The average amount of ground rent was £60 billed every twelve months. The lease lapsed in 2078. Taking into account 53 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £37,100 and £42,800 not including professional charges.
An example of a Freehold Enfranchisement decision for a Gunnersbury flat is 169 Southfield Road in September 2013. the tribunal decided that the premium to be paid in respect of the collective enfranchisement should be £51,203 This case was in relation to 2 flats. The unexpired term as at the valuation date was 64.64 years.