South West London leases on residential properties are gradually losing value. if your lease has approximately ninety years remaining, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you begin paying an additional element called marriage value. Leasehold owners in South West London will mostly be legally entitled to a lease extension; however a solicitor will check if you qualify. In certain situations you may not qualify. There are also strict deadlines and steps to follow once the process is initiated so it’s best to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle South West London 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 lawyer we work with provide it.
16 months ago Kai, came seriously close to the eighty-year threshold with the lease on his purpose- built flat in South West London. In buying his flat two decades ago, the length of the lease was of no bearing. Thankfully, he realised he would soon be paying way over the odds for Extending the lease. Kai extended the lease just under the wire in January. Kai and the landlord eventually agreed on sum of £5,500 . If the lease had descended to less than 80 years, the premium would have gone up by at least £850.
In 2010 we were phoned by Mrs Yasmin Thomas who, having bought a studio apartment in South West London in January 2003. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparable flats in South West London with a long lease were in the region of £285,000. The average amount of ground rent was £45 billed quarterly. The lease ran out on 17 May 2097. Having 71 years remaining we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus legals.
An example of a Freehold Enfranchisement matter before the tribunal for a South West London flat 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 related to 2 flats. The unexpired term was 71.63 years.