Park Royal residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
Leasehold properties in Park Royal with over one hundred years left on the lease are sometimes referred to as ‘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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Royal Bank of Scotland | 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. |
| 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 enhanced control over the value of your Park Royal leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the freeholder of her basement apartment in Park Royal, Hollie commenced the lease extension process as the 80 year mark was quickly nearing. The transaction was finalised in February 2008. The freeholder’s costs were negotiated to less than 600 pounds.
Last month we were contacted by Mr and Mrs. K Ricardo , who completed a first floor flat in Park Royal in November 1995. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Comparative properties in Park Royal with an extended lease were in the region of £200,000. The average amount of ground rent was £50 collected annually. The lease finished in 2102. Considering the 77 years left we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.
An example of a Lease Extension case for a Park Royal premises 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 was in relation to 1 flat. The unexpired term as at the valuation date was 28.42 years.