The re-sale value of a leasehold property in Southall is impacted by how long the lease has left to run. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that all matters can be concluded in advance of the eighty year threshold. Statute enables Southall qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of ninety years. The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Southall with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in Southall,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Southall valuers.
In recent months Dylan, came precariously close to the eighty-year threshold with the lease on his studio flat in Southall. Having purchased his property twenty years previously, the length of the lease was of little relevance. As luck would have it, he recognised he needed to take steps soon on Extending the lease. Dylan arranged for a lease extension just in the nick of time in March. Dylan and the landlord eventually settled on sum of £5,500 . If the lease had slid lower than 80 years, the premium would have increased by at least £950.
Mr and Mrs. I Mercier purchased a purpose-built apartment in Southall in January 2003. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Comparable flats in Southall with a long lease were valued around £181,600. The mid-range amount of ground rent was £55 billed monthly. The lease concluded in 2078. Taking into account 52 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 not including legals.
An example of a Lease Extension case for a Southall premises is 33 Barbican Road in January 2013. The Tribunals calculation of the lease extension premium payable was £17,592. This case was in relation to 1 flat. The unexpired term as at the valuation date was 55.12 years.