Why you should commence your Smithfield lease extension

Why you should commence your Smithfield lease extension today:

A Smithfield lease depreciates with the years remaining on the lease.

Smithfield leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Smithfield residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Smithfield you would be well advised to see if your lease has between 70 and ninety years left. There are good reasons why a Smithfield leaseholder with a lease having around 80 years remaining should take steps to make sure that a lease extension is put in place without delay

An extended lease has roughly the same value as a freehold

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 home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.

Banks and Building Societies will not grant a mortgage on a short lease

Mortgage Lenders are distinct in their lending requirements. Some draw the line at seventy five years outstanding on the lease; others may be willing to lend with anything with more than seventy years. With less than 60 years, it may be challenging to obtain a mortgage at all.

Get in touch with one of our Smithfield lease extension solicitors or enfranchisement solicitors

Regardless of whether you are a tenant or a landlord in Smithfield,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Smithfield valuers.

Smithfield Lease Extension Example Cases:

Joshua, Smithfield, London

Last Summer Joshua, came critically close to the eighty-year threshold with the lease on his first floor apartment in Smithfield. In buying his flat two decades ago, the lease term was of little importance. Luckily, he noticed he would soon be paying way over the odds for Extending the lease. Joshua arranged for a lease extension at the eleventh hour in June. Joshua and the freeholder via the management company in the end settled on sum of £5,500 . If he had missed the deadline, the sum would have gone up by a minimum £950.

Smithfield case:

Dr K Morris bought a recently refurbished apartment in Smithfield in May 2005. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Similar properties in Smithfield with a long lease were valued about £275,000. The mid-range ground rent payable was £65 billed per annum. The lease concluded on 24 June 2093. Taking into account 68 years remaining we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus costs.

Smithfield case:

Last month we were e-mailed by Mr K Young , who purchased a garden apartment in Smithfield in June 1997. We are asked if we could estimate the price would be for a ninety year lease extension. Identical properties in Smithfield with a long lease were in the region of £208,600. The mid-range ground rent payable was £60 collected per annum. The lease lapsed on 1 August 2082. Considering the 57 years as a residual term we approximated the premium to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of professional charges.