The re-sale value of a leasehold property in Southall is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that formalities can be concluded in advance of the eighty year mark. Current legislation enables Southall qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Regardless of whether you are a tenant or a landlord in Southall,the lease extension experts that we work with will always be willing 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.
Following protracted negotiations with the freeholder of her studio flat in Southall, Jessica initiated the lease extension process just as the lease was coming close to the critical eighty-year threshold. The transaction was concluded in August 2010. The freeholder’s charges were restricted to less than 500 GBP.
Mr Nathan Peterson completed a first floor flat in Southall in April 2011. The question was if we could estimate the price would likely be to extend the lease by 90 years. Identical properties in Southall with 100 year plus lease were valued around £290,000. The average ground rent payable was £45 billed annually. The lease expired in 2099. Taking into account 73 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including costs.
An example of a Lease Extension matter before the tribunal 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 affected 1 flat. The unexpired residue of the current lease was 55.12 years.