The closer a residential lease in Southall gets to zero years unexpired, the the greater the reduction in the value of the property. If the residual term has, more than one hundred years remaining then this decrease may be of little impact that being said there will become a stage when a lease has fewer than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary logic behind why you should extend the lease sooner than later. Most flat owners in Southall will meet the qualifying criteria; nevertheless a conveyancing solicitor will be able to advise whether you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
The conveyancers that we work with handle Southall lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
After protracted discussions with the landlord of her two bedroom flat in Southall, Natalie started the lease extension process just as the lease was nearing the all-important 80-year mark. The lease extension was concluded in November 2011. The freeholder’s costs were kept to an absolute minimum.
Ms Jodie Murphy owned a purpose-built flat in Southall in November 2007. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable flats in Southall with 100 year plus lease were valued about £300,000. The mid-range ground rent payable was £50 collected annually. The lease finished in 2100. Having 75 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.
An example of a Lease Extension matter before the tribunal for a Southall premises 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 residue of the current lease was 55.12 years.