Park Royal leases on residential properties are gradually losing value. Where your lease has approximately ninety years unexpired, you should start considering the need for 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. Flat owners in Park Royal will usually qualify for a lease extension; however a solicitor will check your eligibility. In certain cases you may not be entitled. There are prescribed deadlines and steps to follow once the process is triggered so it’s best to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancers that we work with undertake Park Royal 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 lawyer we work with provide it.
In recent months James, came precariously near to the eighty-year threshold with the lease on his ground floor flat in Park Royal. In buying his home two decades ago, the length of the lease was of minimal relevance. Fortunately, he realised he would imminently be paying an escalated premium for Extending the lease. James was able to extend his lease just under the wire in August. James and the landlord subsequently agreed on a premium of £5,500 . If the lease had fallen below 80 years, the amount would have gone up by at least £950.
Mr and Mrs. H Walker purchased a one bedroom apartment in Park Royal in May 2011. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Comparable residencies in Park Royal with an extended lease were valued about £181,600. The average amount of ground rent was £55 collected yearly. The lease expired in 2078. Taking into account 52 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of expenses.
An example of a Lease Extension decision for a Park Royal flat is 99 Connell Crescent in May 2013. the Tribunal held that the relevant sum for the purposes of the lease extension should be £72,566 to be paid by the leaseholder This case affected 1 flat. The number of years remaining on the existing lease(s) was 28.42 years.