North West London leases on residential deteriorating in value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you begin paying an additional element called marriage value. Leasehold owners in North West London will mostly qualify for a lease extension; however a solicitor will confirm if you qualify. In certain circumstances you may not qualify. There are prescribed timetables and formalities to follow once the process has started so it’s best to be guided by a conveyancer during the process.
Leasehold properties in North West London with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers that we work with procure North West London 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 conveyancing solicitor we work with provide it.
Subsequent to unsuccessful correspondence with the freeholder of her two bedroom flat in North West London, Alicia commenced the lease extension process as the eighty year deadline was swiftly nearing. The legal work completed in August 2006. The freeholder’s fees were negotiated to approximately 600 GBP.
Last month we were phoned by Mr and Mrs. C Smith , who acquired a recently refurbished flat in North West London in January 2002. The dilemma was if we could estimate the price could be for a ninety year lease extension. Similar properties in North West London with an extended lease were worth £265,000. The average amount of ground rent was £55 billed annually. The lease expired on 21 August 2099. Given that there were 74 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including legals.
Mr and Mrs. K Fournier was assigned a lease of a ground floor flat in North West London in November 2005. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative flats in North West London with an extended lease were worth £166,400. The mid-range amount of ground rent was £60 invoiced per annum. The lease elapsed on 12 August 2079. Given that there were 54 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £32,300 and £37,400 not including legals.