It’s a harsh certainty that a Park Royal residential lease is a wasting asset. As the lease term reduces so does the value of the property. 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 nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops 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. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Park Royal will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Park Royal with over one hundred years unexpired 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 buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Park Royal,the lease extension experts 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 Park Royal valuers.
Last year Connor, started to get close to the 80-year threshold with the lease on his one bedroom flat in Park Royal. In buying his property twenty years previously, the length of the lease was of minimal interest. by good luck, he noticed he would soon be paying an inflated amount for Extending the lease. Connor arranged for a lease extension just in the nick of time in August. Connor and the freeholder via the managing agents eventually settled on a premium of £5,500 . If he not met the deadline, the figure would have escalated by a minimum £850.
Dr Georgina Kelly was assigned a lease of a basement flat in Park Royal in April 2004. We are asked if we could estimate the price would likely be for a 90 year lease extension. Identical homes in Park Royal with an extended lease were worth £196,400. The mid-range ground rent payable was £55 billed yearly. The lease expired in 2080. Taking into account 54 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £35,200 and £40,600 exclusive of legals.
An example of a Lease Extension matter before the tribunal for a Park Royal property 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 remaining number of years on the lease was 28.42 years.