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
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.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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 also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Smithfield can be a difficult process. We recommend you secure professional help from a conveyancer 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 procuring Smithfield lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ali was the the leasehold proprietor of a studio flat in Smithfield being marketed with a lease of just over 59 years left. Ali informally spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. No ground rent would be due on a lease extension were Ali to invoke his statutory right. Ali procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Last Spring we were contacted by Ms G Campbell , who purchased a one bedroom flat in Smithfield in February 1996. We are asked if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Comparative flats in Smithfield with a long lease were valued about £275,000. The average ground rent payable was £65 collected yearly. The lease expired on 11 November 2093. Taking into account 68 years remaining we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including costs.
Last Autumn we were called by Mr and Mrs. A Nguyen , who was assigned a lease of a purpose-built flat in Smithfield in January 1997. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by ninety years. Comparative premises in Smithfield with a long lease were valued about £208,600. The average amount of ground rent was £60 collected every twelve months. The lease came to a finish in 2082. Considering the 57 years unexpired we calculated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 plus professional charges.