With a long leasehold premises in The Park, you are actually purchasing a right to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy 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 becomes disproportionately greater particularly when there are less than eighty years left. Leasehold owners in The Park with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once a lease has less than eighty years outstanding, under the current legislation the landlord can calculate and demand a larger premium, based on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 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 |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in The Park can be a difficult process. We recommend you secure guidance from a conveyancer and valuer with experience in this area.
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 The Park lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following lengthy discussions with the freeholder of her leasehold apartment in The Park, Morgan commenced the lease extension process just as her lease was nearing the critical eighty-year threshold. The lease extension completed in June 2013. The freeholder’s fees were kept to an absolute minimum.
Last Autumn we were e-mailed by Mr and Mrs. F Green , who owned a one bedroom apartment in The Park in November 2008. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Similar flats in The Park with a long lease were worth £280,000. The average amount of ground rent was £45 invoiced monthly. The lease ended in 2094. Considering the 69 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.
Dr Y García moved into a one bedroom flat in The Park in July 2011. The question was if we could approximate the price would be to extend the lease by ninety years. Comparable homes in The Park with a long lease were worth £216,000. The average amount of ground rent was £60 collected yearly. The lease ran out on 23 September 2083. Given that there were 58 years remaining we calculated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus expenses.