Petts Wood leases on residential deteriorating in value. Where your lease has approximately ninety years remaining, you should start considering the need for a lease extension. An important point to note is that it is desirable for the lease extension to take place before the term of the current lease falls lower than 80 years - otherwise a higher amount will be due. Flat owners in Petts Wood will mostly be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to check your eligibility. In certain circumstances you may not be entitled. There are also strict timetables and formalities to comply with once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold properties in Petts Wood with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you better control over the value of your Petts Wood leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Callum, came perilously close to the 80-year mark with the lease on his ground floor flat in Petts Wood. In buying his flat twenty years previously, the lease term was of no relevance. Fortunately, he noticed he needed to take action soon on Extending the lease. Callum extended the lease just in the nick of time last August. Callum and the landlord in the end agreed on a premium of £5,500 . If the lease had dipped lower than eighty years, the figure would have gone up by a minimum £850.
In 2014 we were contacted by Mr F David who, having took over the lease of a studio flat in Petts Wood in October 2012. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Identical residencies in Petts Wood with 100 year plus lease were worth £205,000. The average ground rent payable was £50 collected per annum. The lease ran out in 2104. Having 78 years left we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension decision for a Petts Wood residence is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The unexpired lease term was 50.57 years.