Southall leases on domestic properties are gradually losing value. Where your lease has about ninety years unexpired, you should start considering the need for a lease extension. 80 years is a significant number: when the unexpired term of a lease drops below this level then you start paying an additional element called marriage value. Flat owners in Southall will usually be legally entitled to a lease extension; however It would be wise to check with a conveyancer to check your eligibility. In some cases you may not be entitled. There are prescribed timetables and steps to comply with once the process is triggered so it’s prudent to be guided by a conveyancer during the process.
Leasehold properties in Southall with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a freeholder in Southall,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Southall valuers.
Jayden was the the leasehold proprietor of a 2 bedroom apartment in Southall on the market with a lease of a few days over 72 years remaining. Jayden on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jayden to invoke his statutory right. Jayden procured expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
Mr Tommy Lee bought a one bedroom apartment in Southall in May 2008. The question was if we could estimate the premium would be to extend the lease by 90 years. Comparative flats in Southall with a long lease were valued about £248,000. The mid-range amount of ground rent was £65 invoiced yearly. The lease lapsed in 2088. Given that there were 63 years left we approximated the compensation to the freeholder to extend the lease to be between £20,900 and £24,200 plus expenses.
An example of a Lease Extension case for a Southall property is 33 Barbican Road in January 2013. The Tribunals calculation of the lease extension premium payable was £17,592. This case related to 1 flat. The unexpired lease term was 55.12 years.