As the the remaining lease term of a Tooting domestic lease decreases so does its value and therefore the value of your property. Where the residual term has, beyond 100 years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should consider extending sooner rather than later. Most flat owners in Tooting will qualify for this right; nevertheless a conveyancing solicitor can advise whether you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold premises in Tooting with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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:
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The lawyers 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 conveyancer we work with provide it.
18 months ago Kyle, came critically close to the eighty-year mark with the lease on his two bedroom apartment in Tooting. Having bought his home two decades ago, the length of the lease was of minimal importance. Thankfully, he realised he would soon be paying an inflated amount for a lease extension. Kyle extended the lease just under the wire in January. Kyle and the freeholder subsequently agreed on an amount of £5,000 . If he not met the deadline, the figure would have increased by a minimum £850.
Mr Leon Roux bought a one bedroom flat in Tooting in September 2004. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable properties in Tooting with a long lease were worth £245,000. The average amount of ground rent was £50 billed quarterly. The lease expired in 2094. Given that there were 68 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.
An example of a Lease Extension case for a Tooting premises 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 was in relation to 1 flat. The unexpired term was 62.94 years.