Owning a apartment usually means owning a lease of the property, which has a finite term of years. your lease will normally be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in West Smithfield. Inevitably, the term of lease left shortens as time goes by. This may pass by relatively unnoticed when the property needs to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Qualifying long lease owners in West Smithfield have the right to extend the lease for an additional ninety years under legislation. Please give careful consideration before putting off your West Smithfield lease extension. Putting off the cost now simply increases the price you will ultimately incur for a lease extension
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in West Smithfield,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with West Smithfield valuers.
Michael owned a 2 bedroom flat in West Smithfield being sold with a lease of a few days over 59 years outstanding. Michael on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Michael to exercise his statutory right. Michael obtained expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2014 we were contacted by Mr and Mrs. T Gray who, having purchased a purpose-built apartment in West Smithfield in June 2011. The question was if we could shed any light on how much (roughly) price would likely be to extend the lease by an additional years. Identical properties in West Smithfield with an extended lease were valued around £300,000. The mid-range amount of ground rent was £50 billed annually. The lease lapsed in 2101. Considering the 75 years remaining we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.
An example of a Lease Extension case for a West Smithfield premises is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case related to 1 flat. The number of years remaining on the existing lease(s) was 66.8 years.