Paddington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Most owners of residential leasehold property in Paddington enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Paddington you must investigate if your lease has between seventy and 90 years remaining. There are good reasons why a Paddington leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is effected without delay
It is generally considered that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Paddington,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Paddington valuers.
Following unsuccessful negotiations with the landlord of her leasehold flat in Paddington, Isobel started the lease extension process as the 80 year deadline was rapidly nearing. The lease extension was finalised in January 2012. The landlord’s costs were restricted to under 500 pounds.
In 2012 we were phoned by Dr O Campbell who, having completed a studio apartment in Paddington in May 1999. We are asked if we could approximate the price would be to prolong the lease by an additional years. Comparative flats in Paddington with 100 year plus lease were in the region of £203,200. The mid-range ground rent payable was £65 billed monthly. The lease expired on 1 October 2087. Taking into account 61 years outstanding we calculated the premium to the landlord to extend the lease to be between £19,000 and £22,000 not including fees.
An example of a Lease Extension decision for a Paddington flat is Flats 37 & 39 88/90 Portland Place in December 2010. The Tribunal determined that the premium payable for the lease extensions in respect of these two flats is as follows:- For Flat 37, the sum of £385,230.00 For Flat 39, the sum of £436,780.00 This case related to 2 flats. The unexpired term as at the valuation date was 24.02 years.