When it comes to residential leasehold property in Southall, you are actually purchasing an entitlement to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly once there are less than 80 years left. Anyone in Southall with a lease nearing 81 years remaining should seriously consider extending it without delay. Once the lease term has below 80 years remaining, under the relevant Act the landlord is entitled to calculate and demand a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Lloyds TSB Scotland | 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. |
Regardless of whether you are a tenant or a landlord in Southall,the lease extension lawyers 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.
Harvey owned a 2 bedroom apartment in Southall on the market with a lease of fraction over sixty years outstanding. Harvey informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Harvey to exercise his statutory right. Harvey procured expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Dr J Cox bought a one bedroom flat in Southall in March 1996. The question was if we could shed any light on how much (roughly) price would likely be to prolong the lease by ninety years. Comparative flats in Southall with an extended lease were valued around £275,000. The average amount of ground rent was £45 invoiced quarterly. The lease terminated in 2094. Considering the 69 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.
An example of a Lease Extension matter before the tribunal for a Southall property 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.