Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in South West London. Inevitably, the length of lease remaining reduces as time goes by. This is often ignored and only becomes a problem when the property needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Eligible leaseholders in South West London have the right to extend the lease for an additional ninety years under Leasehold Reform legislation. Please give due consideration before putting off your South West London lease extension. Putting off the cost now simply increases the price you will ultimately have to pay to extend your lease
It is generally accepted that a residential leasehold with more than 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 worth the same as a freehold for decades to come.
| 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; |
| Chelsea 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in South West London can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with South West London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Subsequent to protracted discussions with the landlord of her first floor flat in South West London, Natalie initiated the lease extension process as the eighty year threshold was swiftly advancing. The transaction was finalised in October 2005. The freeholder’s costs were kept to an absolute minimum.
Last month we were e-mailed by Mr and Mrs. W Thompson , who completed a studio apartment in South West London in February 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Comparable residencies in South West London with a long lease were valued about £280,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease terminated on 21 July 2096. Taking into account 70 years unexpired we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a South West London property is 78 & 80 Newport Road in January 2013. the Tribunal concluded that the premium to be paid by the leaseholder in respect of the freehold reversion is £23,105 This case affected 2 flats. The unexpired lease term was 71.63 years.