Roehampton residential property held on a long lease is a wasting asset as the leaseholder only owns the property for a set term.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| 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 |
| 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 conveyancing solicitors that we work with handle Roehampton 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 conveyancer we work with provide it.
Michael owned a 2 bedroom flat in Roehampton on the market with a lease of a few days over 59 years left. Michael informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Michael to exercise his statutory right. Michael obtained expert advice and secured an acceptable deal without resorting to tribunal and sell the flat.
Mr and Mrs. H Sharif bought a one bedroom apartment in Roehampton in June 1998. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Comparable flats in Roehampton with a long lease were valued about £257,800. The mid-range ground rent payable was £65 billed quarterly. The lease end date was on 8 February 2090. Taking into account 65 years as a residual term we estimated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of expenses.
An example of a Freehold Enfranchisement decision for a Roehampton premises is 19 St. Margarets Crescent in August 2010. the tribunal was of the view that the premium to be paid by the leaseholder for the freehold reversion was £51,983.00 This case affected 3 flats. The unexpired term as at the valuation date was 66.25 years.