The re-sale value of a leasehold property in Petersham is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to start the lease extension process when the lease still has 82 years to run so that all matters can be finalised prior to the eighty year mark. Current legislation entitles Petersham qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Petersham,the lease extension experts 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 Petersham valuers.
Hunter was the the leasehold owner of a conversion flat in Petersham on the market with a lease of just over fifty eight years outstanding. Hunter informally contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. No ground rent would be due on a lease extension were Hunter to exercise his statutory right. Hunter procured expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
Last Summer we were contacted by Dr Leah Morel , who was assigned a lease of a purpose-built apartment in Petersham in September 2001. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Identical residencies in Petersham with 100 year plus lease were in the region of £171,800. The average amount of ground rent was £55 invoiced quarterly. The lease concluded on 6 September 2074. Given that there were 50 years as a residual term we calculated the premium to the landlord to extend the lease to be within £33,300 and £38,400 plus costs.
An example of a Lease Extension decision for a Petersham residence is Ground Floor Flat 91 Bath Road in May 2009. in a case where the freeholder could not be traced, the Brentford County Court ordered that the Lease be surrendered in return for the grant of a new lease of the Premises at a premium determined by the Leasehold Valuation Tribunal. The tribunal concluded that the price payable by the Applicant for the new lease of the premises be £15,900 This case affected 1 flat. The remaining number of years on the lease was 60.45 years.