Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Smithfield. Clearly, the term of lease left reduces as time goes by. This is often ignored and only becomes a problem when the flat or house has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Smithfield have the right to extend the lease for a further ninety years in accordance with legislation. Do give careful deliberation before putting off your Smithfield lease extension. Holding off that expense now only increases the price you will ultimately incur to extend your lease
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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 |
Using our service will provide you better control over the value of your Smithfield leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Joshua owned a high value apartment in Smithfield on the market with a lease of just over 59 years outstanding. Joshua informally spoke with his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 per annum. No ground rent would be due on a lease extension were Joshua to exercise his statutory right. Joshua procured expert advice and secured an acceptable deal informally and readily saleable.
In 2010 we were approached by Mr M Howard who, having was assigned a lease of a first floor flat in Smithfield in July 2004. The dilemma was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative properties in Smithfield with an extended lease were worth £267,600. The mid-range amount of ground rent was £65 invoiced quarterly. The lease ran out in 2093. Considering the 67 years outstanding we calculated the premium to the landlord to extend the lease to be within £14,300 and £16,400 not including expenses.
Mr and Mrs. I Hernández moved into a one bedroom apartment in Smithfield in January 2011. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparative residencies in Smithfield with 100 year plus lease were worth £206,200. The mid-range ground rent payable was £55 invoiced yearly. The lease expired in 2082. Considering the 56 years remaining we estimated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 not including fees.