Unfortunately that a North West London residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the North West London property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher premium will be due. Most leasehold owners in North West London will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Lease extensions in North West London can be a difficult process. We recommend you get guidance from a conveyancing solicitor and surveyor 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 a wealth of experience procuring North West London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Riley, came critically close to the eighty-year mark with the lease on his leasehold flat in North West London. In buying his flat 18 years previously, the unexpired term was of minimal importance. As luck would have it, he recognised he needed to take steps soon on a lease extension. Riley extended the lease just under the wire last January. Riley and the freeholder via the managing agents eventually settled on an amount of £5,500 . If the lease had slid lower than 80 years, the amount would have become more costly by at least £900.
Last year we were e-mailed by Dr Jasper Ward , who took over the lease of a newly refurbished flat in North West London in March 2012. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparative flats in North West London with a long lease were in the region of £250,000. The mid-range amount of ground rent was £50 billed monthly. The lease expired on 12 May 2095. Given that there were 69 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.
Mr and Mrs. V Lee bought a ground floor apartment in North West London in January 2011. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Identical premises in North West London with an extended lease were in the region of £285,000. The average amount of ground rent was £55 invoiced annually. The lease terminated in 2106. Given that there were 80 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.