The re-sale value of a leasehold property in Swiss Cottage depends on how many years the lease has remaining. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to start the lease extension process when a lease still has 82 years remaining so that a lease extension can be finalised ahead of the eighty year threshold. Current legislation entitles Swiss Cottage qualifying lessees to acquire a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 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 |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Swiss Cottage can be a difficult process. We recommend you get guidance from a lawyer and valuer well versed in the legislation and lease extension process.
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 procuring Swiss Cottage lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Ben, came seriously close to the 80-year threshold with the lease on his two bedroom flat in Swiss Cottage. In buying his flat 18 years ago, the length of the lease was of little relevance. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Ben arranged for a lease extension just under the wire in August. Ben and the freeholder eventually settled on sum of £5,500 . If the lease had slipped lower than 80 years, the sum would have escalated by at least £925.
In 2012 we were approached by Mr and Mrs. V Howard who, having acquired a garden flat in Swiss Cottage in August 2008. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Comparative flats in Swiss Cottage with an extended lease were valued about £235,200. The average ground rent payable was £45 billed annually. The lease concluded in 2092. Given that there were 66 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus costs.
An example of a Lease Extension matter before the tribunal for a Swiss Cottage premises 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 related to 2 flats. The unexpired lease term was 16.83 and 16.43.