Fulham leases on residential deteriorating in value. if your lease has in the region of 90 years unexpired, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease dips below this level then you start incurring an additional element called marriage value. Flat owners in Fulham will usually be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to check if you qualify. In certain cases you may not be entitled. There are also strict timetables and procedures to comply with once the process is triggered so it’s best to be guided by a conveyancer during the process.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The lawyers that we work with handle Fulham 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.
Two years ago Nathaniel, started to get near to the eighty-year mark with the lease on his first floor flat in Fulham. In buying his flat 19 years previously, the lease term was of little bearing. As luck would have it, he became aware that he would imminently be paying way over the odds for a lease extension. Nathaniel was able to extend his lease at the eleventh hour last August. Nathaniel and the freeholder via the management company ultimately settled on the final figure of £5,000 . If the lease had fallen below eighty years, the amount would have become more exhorbitant by a minimum £1,025.
In 2012 we were contacted by Mrs V Parker who, having owned a one bedroom flat in Fulham in June 2003. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Identical properties in Fulham with an extended lease were valued about £285,000. The average amount of ground rent was £55 collected annually. The lease termination date was on 21 June 2103. Taking into account 79 years outstanding we calculated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 not including professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Fulham property is 66 and 66a Wardo Avenue in November 2012. The Tribunal determined that the sum of £8,048 is payable by the Applicants in respect of the price for the freehold of the property This case affected 2 flats. The unexpired lease term was 93 years and 162 years.