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Top reasons for Coulsdon lease extension


Main reasons to commence your Coulsdon lease extension today:

A Coulsdon lease depreciates with the years remaining on the lease.

The only way is down when it comes to Coulsdon lease terms. Coulsdon leaseholds that have a remaining term less than than 80 years will de-escalate in market price at a rapid rate, and the cost to extend your lease will rise.

Coulsdon property with a lease extension is almost the same value as a freehold

It is generally accepted that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for decades to come.

Banks and Building Societies may not finance a property on a short lease

Banks and building societies vary in their lending criteria. Some draw the line at 75 years outstanding on the lease; others may be prepared to lend with anything in excess seventy years. Below 60 years, it may be difficult to obtain a mortgage at all.

Lender Requirement
Leeds Building Society 85 years remaining from the start of the mortgage.
Skipton Building Society 85 years from the date of completion of the mortgage

For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges

For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

LEASE EXTENSIONS

We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office
Royal Bank of Scotland Mortgage term plus 30 years.

What makes us experts in Coulsdon lease extensions?

Lease extensions in Coulsdon can be a difficult process. We recommend you obtain professional help from a lawyer 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 Coulsdon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Coulsdon Lease Extension Example Cases:

Oliver, Coulsdon, South London,

Oliver was the the leasehold proprietor of a studio apartment in Coulsdon being sold with a lease of a few days over 61 years remaining. Oliver informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Oliver to exercise his statutory right. Oliver procured expert legal guidance and secured satisfactory resolution informally and sell the flat.

Coulsdon case:

In 2011 we were contacted by Dr Alexander Martinez who, having purchased a purpose-built flat in Coulsdon in February 2003. The question was if we could estimate the premium would likely be for a 90 year lease extension. Identical residencies in Coulsdon with a long lease were worth £270,000. The average ground rent payable was £55 billed every twelve months. The lease terminated in 2099. Taking into account 75 years outstanding we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including expenses.

Decision in Croydon

An example of a Freehold Enfranchisement matter before the tribunal for a Coulsdon flat is 223 Brighton Road in September 2013. The premium payable for the acquisition freehold of the properties should be £10,934 (Ten thousand,nine hundred and thirty four pounds) This case related to 3 flats. The remaining number of years on the lease was 75 years.