Putney leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Putney tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Putney you would be well advised to investigate if your lease has between 70 and 90 years left. There are compelling reasons why a Putney leaseholder with a lease having around eighty years unexpired should take action to ensure that a lease extension is actioned without delay
It is generally considered that a property with in excess of 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 property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Putney,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Putney valuers.
In recent months Evan, came dangerously close to the eighty-year threshold with the lease on his studio apartment in Putney. In buying his property two decades ago, the unexpired term was of little significance. Fortunately, he noticed he would imminently be paying way over the odds for Extending the lease. Evan was able to extend his lease at the eleventh hour in January. Evan and the landlord who owned the flat above eventually agreed on sum of £5,000 . If the lease had descended to less than eighty years, the amount would have increased by a minimum £1,050.
Dr E Bernard completed a one bedroom flat in Putney in February 2002. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Identical residencies in Putney with 100 year plus lease were worth £265,200. The average ground rent payable was £65 collected yearly. The lease lapsed on 13 June 2091. Having 66 years remaining we calculated the premium to the freeholder to extend the lease to be between £15,200 and £17,600 not including legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Putney premises 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 lease term was 66.25 years.