Smithfield 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 gets more expensive. Legislation has been in place for sometime now which entitles qualifying Smithfield residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Smithfield you really ought to see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Smithfield with more than 100 years unexpired 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Regardless of whether you are a tenant or a landlord in Smithfield,the lease extension lawyers 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 Smithfield valuers.
Off the back of lengthy discussions with the freeholder of her one bedroom flat in Smithfield, Isabelle started the lease extension process just as her lease was coming close to the crucial eighty-year deadline. The legal work was concluded in March 2012. The freeholder’s fees were restricted to a tad over four hundred GBP.
In 2010 we were approached by Mrs C Cooper who, having bought a basement apartment in Smithfield in October 2010. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Similar homes in Smithfield with a long lease were worth £290,000. The mid-range ground rent payable was £45 billed monthly. The lease termination date was on 10 March 2099. Given that there were 73 years left we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus costs.
Mr and Mrs. B Murphy was assigned a lease of a one bedroom apartment in Smithfield in March 2009. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by an additional years. Identical homes in Smithfield with 100 year plus lease were in the region of £240,600. The average amount of ground rent was £60 collected yearly. The lease concluded in 2088. Given that there were 62 years remaining we calculated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of costs.