Summerhill leases on residential properties are gradually losing value. if your lease has approximately 90 years left, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease dips below this level then you start incurring an additional element called marriage value. Leasehold owners in Summerhill will usually be legally entitled to a lease extension; however a solicitor should be able check if you qualify. In certain situations you may not qualify. There are also strict timetables and procedures to comply with once the process is initiated so it’s best to be guided by a lawyer during the process.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property 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 are not acceptable. 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; |
| 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 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Summerhill leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago George, started to get close to the 80-year threshold with the lease on his two bedroom apartment in Summerhill. In buying his home 18 years ago, the lease term was of minimal bearing. As luck would have it, he became aware that he needed to take steps soon on Extending the lease. George was able to extend his lease just in the nick of time in September. George and the freeholder via the management company in the end agreed on a premium of £5,000 . If he had missed the deadline, the premium would have gone up by at least £1,075.
In 2009 we were called by Mr Connor Jones who, having was assigned a lease of a ground floor apartment in Summerhill in August 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative flats in Summerhill with a long lease were in the region of £257,800. The mid-range amount of ground rent was £65 collected annually. The lease expiry date was on 20 September 2091. Given that there were 65 years unexpired we calculated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 plus fees.
In 2012 we were phoned by Mr C Hernández who, having moved into a newly refurbished apartment in Summerhill in March 2004. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical premises in Summerhill with 100 year plus lease were in the region of £191,400. The mid-range amount of ground rent was £55 invoiced yearly. The lease expired on 15 June 2080. Considering the 54 years outstanding we calculated the premium to the landlord for the lease extension to be within £34,200 and £39,600 plus expenses.