Unfortunately that a Putney residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Putney property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term drops under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Putney will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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The lawyers that we work with procure Putney lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
After protracted negotiations with the landlord of her purpose-built apartment in Putney, Lauren started the lease extension process as the eighty year mark was fast approaching. The legal work completed in January 2011. The landlord’s costs were restricted to a tad over 600 GBP.
In 2011 we were approached by Ms N King who, having took over the lease of a basement apartment in Putney in March 1999. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Identical residencies in Putney with 100 year plus lease were valued about £218,400. The mid-range amount of ground rent was £60 billed quarterly. The lease lapsed in 2085. Given that there were 59 years unexpired we estimated the premium to the freeholder for the lease extension to be between £27,600 and £31,800 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Putney residence is 19 St. Margarets Crescent in August 2010. the tribunal was of the view that the premium to be paid by the leaseholder for the freehold reversion was £51,983.00 This case was in relation to 3 flats. The unexpired term was 66.25 years.