Chances are that where you own a flat in West London you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
The conveyancing solicitors that we work with undertake West London 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 lawyer we work with provide it.
George owned a conversion apartment in West London being marketed with a lease of a few days over 61 years unexpired. George on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were George to exercise his statutory right. George obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2012 we were called by Mr and Mrs. N Nguyen who, having took over the lease of a one bedroom apartment in West London in August 2005. The question was if we could estimate the price could be to extend the lease by a further 90 years. Similar properties in West London with 100 year plus lease were worth £242,600. The average ground rent payable was £45 billed per annum. The lease concluded on 20 July 2091. Considering the 67 years remaining we calculated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 plus expenses.
An example of a Lease Extension decision for a West London premises is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The remaining number of years on the lease was 72.39 years.