Unfortunately that a Earlsfield residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Earlsfield property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be due. The majority of flat owners in Earlsfield will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Earlsfield leasehold, as your property will be more valuable and saleable in relation to the 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.
Two years ago Kai, came dangerously close to the eighty-year threshold with the lease on his studio apartment in Earlsfield. In buying his property two decades ago, the length of the lease was of little bearing. by good luck, it dawned on him that he needed to take action soon on a lease extension. Kai was able to extend his lease just under the wire last May. Kai and the freeholder via the management company in the end settled on an amount of £5,000 . If he had missed the deadline, the figure would have increased by at least £875.
Mr Charlie Rodríguez acquired a studio apartment in Earlsfield in September 2010. We are asked if we could estimate the price could be to prolong the lease by 90 years. Identical properties in Earlsfield with a long lease were in the region of £285,000. The average amount of ground rent was £45 invoiced annually. The lease ended in 2096. Having 72 years remaining we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Earlsfield premises is 35 Trewint Street in February 2012. The Tribunal arrived at a premium of £32 425 for the freehold reversion. The matter was transferred back to the court for further consideration which required the applicants pay the premium (less any assessed costs) into court after which the court would execute a transfer of the freehold. This case was in relation to 2 flats. The unexpired term as at the valuation date was 70.57 years.