The re-sale value of a leasehold property in Strawberry Hill depends on how many years the lease has left to run. If it is close to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is preferable to start the lease extension process when a lease still has 82 years unexpired so that formalities can be concluded ahead of the eighty year threshold. Statute enables Strawberry Hill qualifying lessees to an additional term of 90 years over and above the existing term, at a nominal rent (no ground rent). The reason 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 Strawberry Hill with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Strawberry Hill can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and surveyor 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 Strawberry Hill lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Omar, came dangerously close to the 80-year threshold with the lease on his basement apartment in Strawberry Hill. In buying his property two decades ago, the lease term was of no significance. As luck would have it, it dawned on him that he would soon be paying way over the odds for a lease extension. Omar extended the lease just in the nick of time last September. Omar and the landlord subsequently agreed on the final figure of £5,500 . If the lease had slipped to less than 80 years, the sum would have increased by at least £925.
Mr R Martínez purchased a ground floor apartment in Strawberry Hill in February 2012. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by an additional years. Comparative homes in Strawberry Hill with a long lease were valued around £250,400. The average amount of ground rent was £65 billed every twelve months. The lease elapsed on 8 October 2090. Taking into account 64 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 not including professional charges.
An example of a Lease Extension matter before the tribunal for a Strawberry Hill premises is Ground Floor Flat 91 Bath Road in May 2009. in a case where the freeholder could not be traced, the Brentford County Court ordered that the Lease be surrendered in return for the grant of a new lease of the Premises at a premium determined by the Leasehold Valuation Tribunal. The tribunal concluded that the price payable by the Applicant for the new lease of the premises be £15,900 This case affected 1 flat. The unexpired term was 60.45 years.