The re-sale value of a leasehold property in Earls Court depends on how long the lease has left to run. If it is near to or fewer than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be finalised well before the 80 year mark. Statute entitles Earls Court qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Retaining our service will provide you better control over the value of your Earls Court leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Hugo owned a high value apartment in Earls Court on the market with a lease of just over 72 years unexpired. Hugo informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Hugo to exercise his statutory right. Hugo procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Dr N Williams completed a basement flat in Earls Court in June 1998. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Similar properties in Earls Court with a long lease were valued around £210,600. The average ground rent payable was £45 collected monthly. The lease came to a finish on 19 March 2086. Taking into account 62 years remaining we estimated the premium to the landlord for the lease extension to be within £18,100 and £20,800 not including fees.
An example of a Freehold Enfranchisement case for a Earls Court property is 5 Wetherby Gardens in June 2014. the Tribunal concluded that the price to be paid for the freehold of the property was £2,369,452. This case related to 5 flats. The unexpired residue of the current lease was 38.98 years.