The re-sale value of a leasehold property in Smithfield depends on how many years the lease has remaining. If it is near to or less than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be addressed in advance of the 80 year cut off point. Current legislation enables Smithfield qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Smithfield with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Lease extensions in Smithfield can be a difficult process. We recommend you obtain guidance from a conveyancer and valuer with experience in this area.
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 in-depth market knowledge 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.
Leon was the the leasehold proprietor of a studio apartment in Smithfield on the market with a lease of just over 72 years left. Leon informally spoke with his freeholder being a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Leon to exercise his statutory right. Leon obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
Last Spring we were phoned by Mr R Rose , who acquired a purpose-built flat in Smithfield in July 2000. The dilemma was 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 valued about £285,000. The mid-range ground rent payable was £45 billed every twelve months. The lease expiry date was in 2097. Considering the 71 years remaining we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including fees.
Mr and Mrs. V Michel moved into a one bedroom apartment in Smithfield in May 1998. The question was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar flats in Smithfield with an extended lease were valued around £225,800. The average ground rent payable was £60 billed monthly. The lease lapsed in 2086. Given that there were 60 years left we estimated the compensation to the landlord to extend the lease to be between £23,800 and £27,400 exclusive of expenses.