The market value of West Hampstead leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the unexpired lease term is less than 80 years
Leasehold properties in West Hampstead with more than 100 years left 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 home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your West Hampstead leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Ollie, came seriously close to the eighty-year threshold with the lease on his one bedroom apartment in West Hampstead. Having bought his home two decades ago, the unexpired term was of minimal significance. by good luck, he became aware that he needed to take steps soon on a lease extension. Ollie extended the lease just ahead of time last September. Ollie and the freeholder in the end settled on an amount of £5,000 . If the lease had descended to less than 80 years, the premium would have escalated by a minimum £1,100.
Last Spring we were approach by Dr S Green , who moved into a first floor apartment in West Hampstead in January 1998. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Similar residencies in West Hampstead with an extended lease were worth £225,400. The average amount of ground rent was £45 billed every twelve months. The lease ran out in 2090. Having 64 years left we approximated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 exclusive of expenses.
An example of a Lease Extension case for a West Hampstead premises is Flat A 372 Cricklewood Lane in January 2013. The Tribunal decided that the premium for the extended lease should be £5,750.00 and that the terms of the new lease should be those set out in annex to the decsion This case affected 1 flat.