It’s a harsh certainty that a Putney residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Putney property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher amount will be due. Most leasehold owners in Putney will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
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.
Half a year ago Arthur, came precariously close to the eighty-year mark with the lease on his purpose- built apartment in Putney. Having purchased his home two decades ago, the unexpired term was of little interest. As luck would have it, he became aware that he would imminently be paying an inflated amount for Extending the lease. Arthur arranged for a lease extension just under the wire last July. Arthur and the landlord in the end settled on sum of £5,500 . If the lease had fallen to less than eighty years, the amount would have become more costly by at least £1,050.
Last Winter we were called by Dr Matthew Flores , who completed a one bedroom flat in Putney in September 2006. The question was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Identical residencies in Putney with a long lease were in the region of £174,200. The mid-range amount of ground rent was £55 invoiced quarterly. The lease came to a finish on 3 January 2076. Given that there were 51 years unexpired we calculated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of costs.
An example of a Freehold Enfranchisement case 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 affected 3 flats. The unexpired term was 66.25 years.