Unfortunately that a Swiss Cottage residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Swiss Cottage property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Swiss Cottage will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold premises in Swiss Cottage with more than one hundred years outstanding on the lease are sometimes 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 freehold unless savings on ground rent and maintenance charges warrant it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Swiss Cottage 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.
Following unsuccessful discussions with the freeholder of her ground floor apartment in Swiss Cottage, Rachael started the lease extension process as the eighty year deadline was quickly approaching. The lease extension was finalised in May 2006. The landlord’s charges were kept to an absolute minimum.
Ms Mia Anderson was assigned a lease of a first floor flat in Swiss Cottage in April 1995. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Identical flats in Swiss Cottage with a long lease were valued about £260,000. The mid-range amount of ground rent was £50 invoiced annually. The lease ended on 28 June 2099. Considering the 73 years remaining we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including legals.
An example of a Lease Extension case for a Swiss Cottage residence is First Floor Flat 20 Fitzjohns Avenue in July 2014. the Tribunal decided that the premiums to be paid for new leases in respect of the Raised Ground Floor Flat and the First Floor Flat were to be calculated as: Raised Ground Floor: £765,175.14 First Floor: £601,617.77 This case affected 2 flats. The unexpired residue of the current lease was 16.83 and 16.43.