If you own a Wimbledon flat or apartment, chances are it is a leasehold property. Even if you have a good number of years left on your lease, it is worth understanding the process for extending your lease – known as leasehold enfranchisement. We look at when you might need to think about extending the lease on your flat, how you might go about it and a few other things you need to know besides.
There are two main types of homeownership in England; freehold and leasehold. Whether a home is on the market as freehold or leasehold is one of the first questions you should ask when viewing the property. Most London flats are sold as leasehold, but leasehold houses are sometimes on sale too.
When you buy the freehold, you are buying the property and the land on which it is built. Buying leasehold gives the purchaser the right to occupy the property for the number of years specified in the lease ? ?the term?.
A key thing you need to check before viewing a property is the lease length – as lease terms can vary dramatically.
A flat?s original lease is likely to be for a long period, which far exceeds the number of years its first owner would live there. As properties get older, and pass between owners, the length of time remaining on a lease is reduced.
Ownership of a leasehold home will revert to the freeholder once the lease runs out so as the number of years left reduces, so does the value of the Leasehold property. Furthermore, as the term of the lease gets shorter, the premium payable for the extension of the lease increases. Most mortgage lenders will require a lease term to be as long as the mortgage term plus a further 50 to 75 years, so anyone buying a flat with a lease of fewer than 80 years remaining may find it harder to obtain a mortgage.
However, under the 1993 Leasehold Reform, Housing and Urban Development Act, flat owners are entitled to a 90-year extension to their lease for a fair market price, as long as they have owned the property for at least two years. This means that you will pay a premium to obtain an additional 90 years to the existing term and the ground rent will be reduced to a peppercorn. If your lease has less than 90 years left to run, you really should think about extending it, not only in case you need to sell or re-mortgage but also because a lease term above 80 years does not attract marriage value. This is the increase in the value of the flat attributable to the fact the lease has been extended. This has to be shared equally between the parties.
You should start by appointing a solicitor with experience of leasehold enfranchisement as well as a professional surveyor, who will give you a valuation for the cost of the lease extension (the premium).
You or your solicitor should then serve the freeholder with a Section 42 notice, Under the 1993 Leasehold Reform, Housing and Urban Development Act, which informs the freeholder of your wish to be granted a lease extension and the amount you propose for the premium. You will need to specify when your landlord should respond to you with a counter-notice ? this must be no less than two months from the date you served the original notice.
You may be asked to pay a deposit of ?250, or 10% of the premium set out in the Section 42 notice if it is more. The landlord has a right to access your property to conduct their own valuation.
You will be liable to pay your own and your landlord?s legal and valuation fees.
The landlord must respond to you with a counter-notice, stating whether they accept your terms. You will then enter negotiations until terms are agreed by you both.
It isn?t necessary to take this legal route if you can negotiate terms with your landlord informally. However, it is still advisable to have an independent valuation and legal advice before agreeing to anything – to make sure you are receiving the most favourable terms possible.
How long the process takes depends on lots of factors, including the speed of communication between you, your solicitor and your freeholder and the surveyors appointed by both parties but it can take a number of months.
Disputes between the landlord and leaseholder can be referred to an independent body known as the First-Tier Tribunal.
Depending on the amount of time left on your current lease, leasehold enfranchisement can definitely be worth it. If you allow the length of time on your lease to drop below 80 years, the process becomes much more expensive because of the requirement to pay marriage value and the property may become hard to sell, if you need to, because of the difficulty of a buyer obtaining a mortgage on it.
If you live in a leasehold property, an alternative to extending a lease is to get together with your fellow leaseholders and buy the freehold. This is known as collective enfranchisement.
You will need to get at least 50% of leaseholders in your block to agree to participate for the collective enfranchisement to go ahead.
If you would like further information or advice about enfranchisement Andrew Scott Robertson have a specialist surveyor who is an expert in these matters and will be pleased to talk about the issues and advise you on your personal circumstances. Please contact us.
If you are looking to buy or sell property in Wimbledon, whether freehold or leasehold, Andrew Scott Robertson are local estate agents. We would be happy to discuss your requirements and show you our selection of properties. Please contact us today.
Andrew Scott Robertson, South West London?s leading industrial agents, announces that, acting on behalf of a major fund, it has completed the letting of three units totalling 6,755 sq. ft. at Parkfield Industrial Estate, Battersea, SW11
setting a new headline rent of ?30.00 per sq. ft. This rental level is believed to be the highest rent ever achieved for a standard open market industrial unit letting in the United Kingdom.
Parkfield Industrial Estate is located in the heart of South West London, close to Clapham Junction railway station. The estate extends to a total of 69,000 sq. ft. contained within 20 units. Andrew Scott Robertson have acted as letting agent on this estate since August 2016, when rents were in the order of ?11.00-15.00 per sq. ft. 4 units were destroyed by fire in 2016 and practical completion of the rebuild was achieved in May 2018. The previous leases on these units expired within the construction period.?
A leading international auction house, has completed a new 10 year lease at a rent of ?63,090 per annum on 2,100 sq. ft., equating to a ?30 per sq. ft. rent. A provider of flexible commercial kitchen space, has also completed a 25 year lease, with 10 years term certain, at a rent of ?30 per sq. ft. on 4,600 sq. ft. with just three months? rent free.
Stewart Rolfe, Director of Commercial Property at Andrew Scott Robertson commented: ??The strong performance of the South West London Industrial Market is further exemplified by these lettings where high quality units in close proximity to the City and West End remain a priority for occupiers. The current demand for such units together with the reduction in supply due to conversion to residential have led to a substantial increase in rental levels over the last 12-24 months and, specifically a 63% increase in rental values on this estate.
Tel.: 020 8971 4999 / Email: firstname.lastname@example.org
If you think Wimbledon is just about tennis think again! Wimbledon Estate Agents and Chartered Surveyors Andrew Scott Robertson pushed the boat out to raise money for the Royal National Lifeboat Institution on Saturday 30th June.? Director Ian Ailes, who organised the event with the RNLI Clapham Branch said, ?You don?t see many boats in Wimbledon yet our nearest Lifeboat station is on the Thames at Chiswick just 7 miles away; the 2nd busiest lifeboat station in the country. It is manned 24 hours a day and has a response time of just 90 seconds.? So far this year they have attended 107 incidents and rescued 14 people and 3 dogs. Two of our Directors are Lifeboat supporters so we decided to organise a fundraising event on our Wimbledon Village office forecourt by offering to double whatever was donated on the day with a target of ?1,000. We are very pleased to say we raised over ?1,300?.?
Our photo features (L-R) Residential Sales Team: Rob Wells, David Faulkner, Samantha Cross and Professional Services Director Ian Ailes.?
We are pleased to report that Ian Ailes FRICS, Commercial Director for Andrew Scott Robertson was featured in the recent RICS Q3 2017 UK Commercial Property Market Survey.
The RICS survey is widely recognised as one of the best indicators of developments in the UK commercial property occupier and investor markets. The results of the Q3 survey show that both investor and occupier demand edged up during Q3 for UK commercial property, but there is still a significant difference between sectors with industrial clearly outperforming.
Survey in brief
The view from ASR
Ian Ailes comments in the report ?The market is suffering from a negative view and there is nothing on the horizon likely to improve perception. The next event is the Chancellor?s autumn statement but we need something positive in it to incentivise businesses ie less taxation which will generate a larger tax collection. Money is cheap but no one wants to borrow if rates may rise. The Bank of England needs to address this. Threats of interest rate rises are over recessionary. Domestic SDLT needs to be reduced or made fairer to stimulate sales and so new builds from which the economy takes its lead.?
The view from RICS
The feedback to the Q3 survey reflects some of the broader macro issues, with the underlying momentum in the occupier market a little firmer further away from the capital. This is also mirrored in valuation concerns with around two thirds of respondents viewing the London market as being dear.
A key issue going forward will be how the market responds to the likely first interest rate rise in a decade next month. Given that expectations are only for a modest tightening in policy, the likelihood is that it will be able the weather the shift in the mood music. But this remains a potential challenge if rates go up more than is currently anticipated.
To read the survey in full click here.
Andrew Scott Robertson are proud to present Hatton House, 77 ? 91 Hartfield Road, an outstanding development of new commercial units located in central Wimbledon.
Set beneath a highly sought after residential development, Hatton House comprises 6,458 sq. ft. of Grade A specification office space, arranged over ground and lower ground levels, and offers flexible, open-plan layouts with secure parking and much valued outside terrace space.
Rents per sq. ft. vary from ?40 to ?45 according to unit number as follows:
Stewart Rolfe, Director of Commercial Agency at Andrew Scott Robertson, comments ?Well-designed, conveniently located office space remains in high demand in Wimbledon and the flexible open-plan layouts offered by Hatton House are particularly conducive to today?s working environments. We expect high levels of interest for this exceptional new commercial development in the heart of SW19.?
Stewart Rolfe, Director of Commercial Agency t. 020 8971 4994 / e. email@example.com
Victoria Nicol, Marketing t. 020 8971 6780 / e. firstname.lastname@example.org
24 High Street,
London SW19 5DX
Tel: +44 (0)20 8971 6780
Fax: +44 (0)20 8946 3683