Unfortunately that a Heathrow residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Heathrow property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Heathrow will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Heathrow with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 procure Heathrow 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 conveyancer we work with provide it.
Off the back of lengthy discussions with the freeholder of her first floor flat in Heathrow, Eleanor started the lease extension process as the eighty year threshold was rapidly approaching. The transaction was finalised in July 2007. The freeholder’s charges were kept to an absolute minimum.
In 2010 we were called by Dr Leah Mason who, having bought a basement apartment in Heathrow in June 1999. The dilemma was if we could estimate the price could be to prolong the lease by ninety years. Similar flats in Heathrow with an extended lease were valued about £243,000. The average ground rent payable was £65 billed annually. The lease elapsed on 18 September 2088. Having 63 years as a residual term we estimated the premium to the landlord to extend the lease to be between £20,000 and £23,000 exclusive of legals.
An example of a Lease Extension decision for a Heathrow property is 147 Redford Close in June 2012. The Tribunal determined the lease extension premium to be at £4,200 This case affected 1 flat. The number of years remaining on the existing lease(s) was 82.93 years.