When it comes to residential leasehold property in Tooting, you are actually buying an entitlement to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years remaining. Leasehold owners in Tooting with a lease drawing near to 81 years remaining should seriously think of extending it as soon as possible. Once the lease term has fewer than eighty years left, under the current statute the freeholder can calculate and demand a larger premium, based on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Tooting with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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 |
The conveyancers that we work with procure Tooting lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Half a year ago Sam, came seriously close to the 80-year mark with the lease on his garden flat in Tooting. Having bought his property 18 years ago, the lease term was of no concern. Fortunately, he realised he would imminently be paying an inflated amount for Extending the lease. Sam was able to extend his lease just under the wire in January. Sam and the freeholder via the managing agents subsequently settled on the final figure of £5,500 . If the lease had fallen to less than eighty years, the sum would have increased by at least £1,075.
Last Autumn we were phoned by Dr Dexter Gunderson , who took over the lease of a purpose-built apartment in Tooting in September 2002. The dilemma was if we could estimate the price could be to prolong the lease by ninety years. Comparable homes in Tooting with a long lease were in the region of £176,200. The mid-range amount of ground rent was £65 collected quarterly. The lease elapsed on 22 May 2082. Considering the 56 years remaining we estimated the compensation to the freeholder to extend the lease to be between £29,500 and £34,000 not including expenses.
An example of a Lease Extension matter before the tribunal for a Tooting flat 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 remaining number of years on the lease was 62.94 years.