As the length of the unexpired term of a West Smithfield domestic lease decreases so does its value and therefore the value of your property. If the lease has, in excess of 99 years remaining then this decrease may be of little impact that being said there will become a point in time when a lease has under than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary logic behind why you should extend the lease without delay. Most flat owners in West Smithfield will qualify for this right; that being said a lawyer can confirm whether you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold properties in West Smithfield with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake West Smithfield 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 conveyancer we work with provide it.
Two years ago Sebastian, came seriously close to the eighty-year threshold with the lease on his studio apartment in West Smithfield. In buying his home two decades ago, the lease term was of little interest. As luck would have it, he recognised he would soon be paying an escalated premium for a lease extension. Sebastian arranged for a lease extension just under the wire last August. Sebastian and the landlord ultimately settled on an amount of £5,000 . If he had missed the deadline, the sum would have gone up by a minimum £1,075.
Dr W Richardson took over the lease of a one bedroom apartment in West Smithfield in July 1999. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparative premises in West Smithfield with a long lease were in the region of £250,400. The average ground rent payable was £65 collected monthly. The lease finished on 10 August 2090. Given that there were 64 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £19,000 and £22,000 exclusive of costs.
An example of a Lease Extension decision for a West Smithfield property is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case was in relation to 1 flat. The unexpired term was 66.8 years.