It’s a harsh certainty that a Tooting residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Tooting property prices.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term drops below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to 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 Most flat owners in Tooting will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you increased control over the value of your Tooting leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Connor, came seriously near to the eighty-year threshold with the lease on his purpose- built apartment in Tooting. In buying his property two decades ago, the unexpired term was of minimal interest. Thankfully, he became aware that he would soon be paying an inflated amount for a lease extension. Connor extended the lease just under the wire last September. Connor and the freeholder subsequently agreed on sum of £5,000 . If the lease had dropped lower than 80 years, the price would have gone up by at least £875.
Last month we were contacted by Mr Adam Morris , who bought a one bedroom apartment in Tooting in October 2003. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Identical flats in Tooting with a long lease were in the region of £227,800. The average ground rent payable was £45 invoiced monthly. The lease came to a finish on 7 July 2091. Considering the 65 years left we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.
An example of a Lease Extension matter before the tribunal for a Tooting property is 14 Nutwell Street in January 2014. The premium payable for the acquisition of a new lease of the subject premises was in the sum of £30,523 This case affected 1 flat. The unexpired term as at the valuation date was 62.94 years.