It’s a harsh truth that a West Smithfield residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the West Smithfield property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining drops below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in West Smithfield will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in West Smithfield can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with West Smithfield lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Isaac owned a high value apartment in West Smithfield on the market with a lease of a few days over 72 years unexpired. Isaac informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. No ground rent would be payable on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and secured an acceptable deal informally and sell the flat.
In 2011 we were e-mailed by Dr Robyn Robinson who, having took over the lease of a ground floor apartment in West Smithfield in June 2010. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Comparable residencies in West Smithfield with 100 year plus lease were in the region of £257,800. The average amount of ground rent was £65 collected monthly. The lease end date was in 2091. Taking into account 65 years remaining we approximated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 plus professional charges.
An example of a Lease Extension case for a West Smithfield flat 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.