The market value of Swiss Cottage leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the unexpired lease term is less than eighty years
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Swiss Cottage,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Swiss Cottage valuers.
Two years ago Ali, came critically close to the eighty-year threshold with the lease on his one bedroom apartment in Swiss Cottage. Having purchased his home two decades ago, the unexpired term was of minimal concern. Thankfully, he became aware that he would imminently be paying way over the odds for Extending the lease. Ali was able to extend his lease at the eleventh hour in March. Ali and the freeholder via the managing agents subsequently settled on the final figure of £6,000 . If he not met the deadline, the sum would have become more costly by at least £1,000.
Last January we were called by Mr and Mrs. A González , who took over the lease of a studio flat in Swiss Cottage in March 2008. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Identical properties in Swiss Cottage with 100 year plus lease were in the region of £245,000. The average ground rent payable was £45 invoiced annually. The lease ended in 2094. Considering the 68 years unexpired we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.
An example of a Lease Extension matter before the tribunal 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 related to 2 flats. The unexpired term was 16.83 and 16.43.