Isleworth leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Isleworth tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Isleworth you would be well advised to investigate if your lease has between 70 and 90 years left. There are compelling reasons why a Isleworth leaseholder with a lease having around eighty years unexpired should take steps to make sure that a lease extension is put in place without delay
It is generally accepted that a property with in excess of 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 35 years left, the property will be equivalent in value to a freehold for many years in the future.
Lender | Requirement |
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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. |
Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Isleworth 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.
Evan was the the leasehold owner of a 2 bedroom apartment in Isleworth being marketed with a lease of a few days over sixty years left. Evan on an informal basis approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Evan to exercise his statutory right. Evan obtained expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
Dr Oliver Mason acquired a ground floor flat in Isleworth in August 2008. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative homes in Isleworth with a long lease were in the region of £280,000. The mid-range ground rent payable was £45 billed every twelve months. The lease termination date was in 2095. Given that there were 70 years as a residual term we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including professional charges.
An example of a Lease Extension decision for a Isleworth premises is Ground Floor Flat 91 Bath Road in May 2009. in a case where the freeholder could not be traced, the Brentford County Court ordered that the Lease be surrendered in return for the grant of a new lease of the Premises at a premium determined by the Leasehold Valuation Tribunal. The tribunal concluded that the price payable by the Applicant for the new lease of the premises be £15,900 This case was in relation to 1 flat. The unexpired term was 60.45 years.