Park Royal leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Park Royal enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Park Royal you would be well advised to see if your lease has between seventy and 90 years remaining. There are good reasons why a Park Royal leaseholder with a lease having around eighty years unexpired should take action to make sure that a lease extension is effected without delay
Leasehold properties in Park Royal with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before 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 conveyancers that we work with procure Park Royal 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.
Luca was the the leasehold owner of a conversion apartment in Park Royal being sold with a lease of a few days over 59 years left. Luca informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Luca to exercise his statutory right. Luca obtained expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. I Laurent , who owned a studio apartment in Park Royal in April 1999. We are asked if we could estimate the price could be to extend the lease by 90 years. Comparable properties in Park Royal with a long lease were valued around £275,000. The mid-range amount of ground rent was £65 billed per annum. The lease came to a finish on 12 February 2093. Considering the 68 years outstanding we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Park Royal premises is 99 Connell Crescent in May 2013. the Tribunal held that the relevant sum for the purposes of the lease extension should be £72,566 to be paid by the leaseholder This case related to 1 flat. The unexpired lease term was 28.42 years.