The re-sale value of a leasehold property in Wembley is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that all matters can be concluded prior to the 80 year threshold. Statute enables Wembley qualifying lessees to an additional term of 90 years in addition to the remaining term, at a notional rent (zero ground rent). 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 conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately 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 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Wembley 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.
Following protracted negotiations with the landlord of her garden apartment in Wembley, Bethany started the lease extension process as the 80 year threshold was quickly advancing. The transaction was concluded in July 2006. The freeholder’s fees were kept to an absolute minimum.
Last Summer we were approach by Dr P Sharif , who completed a studio apartment in Wembley in April 2007. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Comparative flats in Wembley with 100 year plus lease were in the region of £208,600. The average ground rent payable was £60 collected every twelve months. The lease end date was in 2083. Considering the 57 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 plus professional charges.
An example of a Lease Extension case for a Wembley premises is Ground Floor Flat 79 London Road in September 2012. the Tribunal held that the premium payable for the lease extension should be £7,636 This case affected 1 flat. The remaining number of years on the lease was 74 years.