The rule of thumb is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Westminster may extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Do give careful consideration before delaying your Westminster lease extension. Putting off the costs now simply increases the premium you will ultimately be required to pay for a lease extension.
It is generally accepted that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
The lawyers that we work with undertake Westminster 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 conveyancing solicitor we work with provide it.
Off the back of unsuccessful discussions with the freeholder of her studio flat in Westminster, Georgina started the lease extension process as the eighty year mark was swiftly nearing. The lease extension completed in June 2013. The landlord’s charges were negotiated to under 450 GBP.
Mr and Mrs. V Mitchell owned a purpose-built apartment in Westminster in August 2004. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparable properties in Westminster with 100 year plus lease were worth £203,200. The average ground rent payable was £65 billed quarterly. The lease terminated on 24 July 2087. Taking into account 61 years unexpired we estimated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Westminster premises is Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110 This case affected 2 flats. The unexpired lease term was 56 years.