Chances are that where you own a flat in Smithfield you actually own a long leasehold interest over your property
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 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 |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Lease extensions in Smithfield can be a difficult process. We recommend you get professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Smithfield lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Blake, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Smithfield. In buying his flat 18 years ago, the lease term was of little concern. Luckily, he realised he would soon be paying an inflated amount for Extending the lease. Blake arranged for a lease extension just in the nick of time in January. Blake and the freeholder via the management company subsequently agreed on an amount of £6,000 . If the lease had dipped lower than eighty years, the amount would have escalated by at least £1,100.
In 2012 we were approached by Mr D Taylor who, having purchased a garden flat in Smithfield in February 2001. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by a further 90 years. Similar properties in Smithfield with a long lease were worth £240,600. The mid-range amount of ground rent was £60 invoiced annually. The lease concluded on 18 August 2088. Considering the 62 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 not including fees.
In 2012 we were called by Mrs Jade Campbell who, having completed a basement apartment in Smithfield in July 1999. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparable residencies in Smithfield with an extended lease were worth £174,200. The average amount of ground rent was £55 billed quarterly. The lease expired in 2077. Having 51 years left we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of legals.