Becontree leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Becontree residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Becontree you must see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Becontree with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Becontree,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Becontree valuers.
16 months ago Kyle, came very close to the 80-year threshold with the lease on his basement flat in Becontree. Having bought his flat two decades ago, the lease term was of minimal importance. Luckily, he recognised he would soon be paying way over the odds for a lease extension. Kyle extended the lease just under the wire in April. Kyle and the landlord who owned the flat above eventually settled on the final figure of £5,000 . If the lease had slipped lower than eighty years, the price would have increased by at least £1,125.
Ms Jessica Robinson was assigned a lease of a one bedroom apartment in Becontree in April 2006. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar homes in Becontree with a long lease were valued about £200,800. The mid-range amount of ground rent was £65 billed quarterly. The lease elapsed on 20 September 2085. Given that there were 60 years remaining we approximated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 exclusive of professional charges.
An example of a Lease Extension case for a Becontree flat is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case was in relation to 1 flat. The unexpired lease term was 61.36 years.