The re-sale value of a leasehold property in Greenwich depends on how many years the lease has remaining. If it is near to or less than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be finalised in advance of the 80 year mark. Statute entitles Greenwich qualifying lessees to an additional term of 90 years in addition to the unexpired term, at a peppercorn rent (zero ground rent). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Greenwich leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Ben, started to get near to the eighty-year mark with the lease on his leasehold apartment in Greenwich. Having purchased his flat twenty years previously, the length of the lease was of little concern. As luck would have it, he realised he needed to take action soon on a lease extension. Ben arranged for a lease extension at the eleventh hour in June. Ben and the landlord who owned the flat above in the end agreed on a premium of £5,500 . If he had missed the deadline, the price would have become more costly by at least £900.
In 2013 we were contacted by Mr G Bertrand who, having purchased a ground floor flat in Greenwich in September 1996. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Similar flats in Greenwich with 100 year plus lease were worth £260,000. The mid-range amount of ground rent was £50 billed annually. The lease came to a finish in 2097. Having 73 years remaining we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.
An example of a Lease Extension case for a Greenwich property is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case related to 2 flats. The remaining number of years on the lease was 72 years.