When it comes to domestic leasehold property in Putney, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than 80 years left. Anyone in Putney with a lease drawing near to 81 years unexpired should seriously consider extending it without delay. Once the lease term has below 80 years remaining, under the current legislation the landlord can calculate and demand a greater amount, assessed on a technical calculation, known as “marriage value” which is due.
Leasehold premises in Putney with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers 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.
Joshua was the the leasehold owner of a studio flat in Putney being sold with a lease of a little over 72 years outstanding. Joshua on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Joshua to invoke his statutory right. Joshua obtained expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last Spring we were called by Mr and Mrs. O Kelly , who purchased a one bedroom flat in Putney in November 2011. We are asked if we could estimate the price would likely be to prolong the lease by 90 years. Identical homes in Putney with a long lease were worth £191,400. The average amount of ground rent was £55 collected every twelve months. The lease terminated in 2078. Considering the 54 years unexpired we approximated the compensation to the landlord for the lease extension to be between £34,200 and £39,600 not including legals.
An example of a Freehold Enfranchisement decision 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 as at the valuation date was 66.25 years.