With a long leasehold property in Paddington, you are actually buying an entitlement to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably once there are less than eighty years remaining. Residents in Paddington with a lease nearing 81 years unexpired should seriously think of extending it sooner rather than later. Once the lease term has fewer than eighty years outstanding, under the relevant Act the freeholder can calculate and demand a greater amount, based on a technical multiplication, known as “marriage value” which is due.
Leasehold premises in Paddington with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 landlord in Paddington,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Paddington valuers.
Two years ago Aarav, came precariously near to the eighty-year mark with the lease on his garden apartment in Paddington. In buying his home 18 years ago, the unexpired term was of minimal relevance. As luck would have it, he noticed he needed to take action soon on a lease extension. Aarav was able to extend his lease just under the wire last June. Aarav and the freeholder via the management company in the end settled on a premium of £6,000 . If he failed to meet the deadline, the sum would have escalated by at least £1,075.
In 2013 we were approached by Ms Amy Martínez who, having completed a recently refurbished flat in Paddington in February 2012. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative properties in Paddington with a long lease were worth £285,000. The average amount of ground rent was £55 collected every twelve months. The lease ended on 17 May 2105. Having 80 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of costs.
An example of a Lease Extension case for a Paddington premises 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 was 24.02 years.