Unfortunately that a Park Royal residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Park Royal property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Park Royal will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in Park Royal with more than 100 years left 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 premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
Using our service will provide you better control over the value of your Park Royal leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful discussions with the freeholder of her purpose-built apartment in Park Royal, Leah initiated the lease extension process as the 80 year threshold was swiftly approaching. The legal work was finalised in October 2013. The freeholder’s fees were kept to an absolute minimum.
Last month we were phoned by Dr Alice Lefèvre , who moved into a one bedroom apartment in Park Royal in April 1998. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Identical properties in Park Royal with 100 year plus lease were worth £300,000. The average ground rent payable was £50 invoiced monthly. The lease terminated in 2102. Given that there were 76 years outstanding we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
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 remaining number of years on the lease was 28.42 years.