Streatham Vale residential property held on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
The conveyancers that we work with handle Streatham Vale 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 conveyancer we work with provide it.
Jasper owned a high value apartment in Streatham Vale on the market with a lease of a little over fifty eight years outstanding. Jasper informally contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Jasper to invoke his statutory right. Jasper obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2012 we were called by Dr Muhammad Anderson who, having took over the lease of a ground floor flat in Streatham Vale in October 2007. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable homes in Streatham Vale with a long lease were in the region of £181,600. The mid-range ground rent payable was £55 billed every twelve months. The lease concluded in 2077. Given that there were 52 years remaining we estimated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 plus costs.
Last year we were approach by Ms Bethany Adams , who completed a garden flat in Streatham Vale in March 1999. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Similar premises in Streatham Vale with 100 year plus lease were worth £285,000. The average ground rent payable was £45 invoiced every twelve months. The lease expired in 2097. Taking into account 72 years left we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of legals.