With a residential leasehold premises in Swiss Cottage, you are actually buying an entitlement to live in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than eighty years left. Residents in Swiss Cottage with a lease nearing 81 years unexpired should seriously consider extending it sooner as opposed to later. Once a lease has less than eighty years remaining, under the current legislation the freeholder can calculate and levy a greater premium, assessed on a technical calculation, known as “marriage value” which is due.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 gives you increased control over the value of your Swiss Cottage 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 have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jason was the the leasehold owner of a studio apartment in Swiss Cottage being sold with a lease of a little over 72 years left. Jason informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Jason to invoke his statutory right. Jason obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
Last year we were e-mailed by Dr C Mitchell , who took over the lease of a first floor apartment in Swiss Cottage in January 2007. The dilemma was if we could estimate the price could be to prolong the lease by an additional years. Comparative residencies in Swiss Cottage with 100 year plus lease were valued around £255,000. The average amount of ground rent was £50 collected yearly. The lease finished on 3 March 2096. Having 71 years unexpired we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.
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 was in relation to 2 flats. The remaining number of years on the lease was 16.83 and 16.43.