West Smithfield leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in West Smithfield enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in West Smithfield you should investigate if your lease has between 70 and ninety years left. There are good reasons why a West Smithfield leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is effected without delay
Leasehold premises in West Smithfield with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in West Smithfield,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with West Smithfield valuers.
Off the back of protracted negotiations with the freeholder of her two bedroom apartment in West Smithfield, Lauren commenced the lease extension process as the 80 year mark was rapidly coming. The transaction was concluded in April 2012. The landlord’s charges were negotiated to about 600 pounds.
Mr and Mrs. Y Roux was assigned a lease of a one bedroom apartment in West Smithfield in November 2000. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Identical homes in West Smithfield with a long lease were worth £206,200. The average ground rent payable was £60 billed yearly. The lease came to a finish in 2082. Taking into account 56 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus costs.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired term was 66.8 years.