Unfortunately that a Earlsfield residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Earlsfield property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining falls under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Earlsfield will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Earlsfield with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 gives you increased control over the value of your Earlsfield leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Jackson, came very near to the 80-year mark with the lease on his leasehold flat in Earlsfield. In buying his flat 19 years ago, the length of the lease was of minimal relevance. Thankfully, he realised he would soon be paying way over the odds for Extending the lease. Jackson extended the lease just under the wire last June. Jackson and the freeholder via the managing agents ultimately settled on a premium of £5,000 . If he not met the deadline, the figure would have become more costly by a minimum £1,150.
Last Winter we were e-mailed by Mr Edward Simon , who took over the lease of a one bedroom flat in Earlsfield in August 2008. The question was if we could estimate the premium would likely be for a ninety year lease extension. Comparable properties in Earlsfield with an extended lease were in the region of £205,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease expired in 2104. Taking into account 79 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Earlsfield residence 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 related to 2 flats. The unexpired term as at the valuation date was 70.57 years.