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 the lease gets more expensive. It is the case that most Smithfield tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Smithfield you should investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Smithfield flat owner with a lease having around eighty years remaining should take steps to ensure that a lease extension is effected without delay
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 professional help from a conveyancer and surveyor 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 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.
In 2014 Jackson, started to get close to the 80-year threshold with the lease on his one bedroom apartment in Smithfield. In buying his property 18 years previously, the unexpired term was of no interest. Thankfully, he realised he needed to take steps soon on Extending the lease. Jackson arranged for a lease extension just in the nick of time in August. Jackson and the freeholder subsequently settled on the final figure of £5,000 . If the lease had dropped to less than 80 years, the amount would have become more costly by at least £900.
Last month we were approach by Mrs Sophie Williams , who moved into a first floor flat in Smithfield in May 1998. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by a further 90 years. Comparative homes in Smithfield with a long lease were worth £171,800. The average ground rent payable was £55 collected every twelve months. The lease expiry date was in 2076. Considering the 50 years outstanding we calculated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 exclusive of legals.
Last month we were called by Mr and Mrs. T André , who purchased a ground floor apartment in Smithfield in May 2001. The question was if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparable homes in Smithfield with 100 year plus lease were worth £280,000. The average ground rent payable was £45 collected monthly. The lease elapsed in 2096. Having 70 years remaining we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including expenses.