With a residential leasehold premises in Tower Hill, you are actually purchasing a right to live in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about 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 gets disproportionately greater notably when there are less than eighty years left. Anyone in Tower Hill with a lease nearing 81 years unexpired should seriously consider extending it as soon as possible. When the lease term has below eighty years outstanding, under the relevant legislation the landlord is entitled to calculate and charge a greater amount, assessed on a technical multiplication, known as “marriage value” which is payable.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Lease extensions in Tower Hill can be a difficult process. We recommend you procure guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
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 a wealth of experience dealing with Tower Hill lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last October Callum, started to get near to the 80-year threshold with the lease on his studio apartment in Tower Hill. In buying his flat two decades ago, the unexpired term was of little bearing. As luck would have it, it dawned on him that he would imminently be paying way over the odds for a lease extension. Callum was able to extend his lease just ahead of time in June. Callum and the landlord subsequently settled on an amount of £6,000 . If the lease had dropped below 80 years, the premium would have gone up by a minimum £1,025.
In 2012 we were e-mailed by Dr Yasmin Mason who, having was assigned a lease of a basement flat in Tower Hill in September 2007. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable homes in Tower Hill with an extended lease were valued around £275,000. The mid-range ground rent payable was £55 billed per annum. The lease elapsed on 20 November 2102. Taking into account 76 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus expenses.
An example of a Freehold Enfranchisement decision for a Tower Hill premises is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case related to 41 flats. The unexpired lease term was 107 years.