If you are facing a significant premium because your lease in Eden Park has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Eden Park lease depreciates with the years remaining on the lease.
Eden Park leases on domestic deteriorating in value. Where your lease has about ninety years unexpired, you should start considering the need for a lease extension. If lease term is under 80 years, you will then have to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Eden Park will usually qualify for a lease extension; however it’s a good idea to check with a conveyancer to check your eligibility. In some circumstances you may not be entitled. There are also strict timetables and formalities to comply with once the process is triggered so it’s best to be guided by a conveyancing solicitor during the process.
An extended lease has roughly the same value as a freehold
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
Lending institutions will not loan monies on a short lease
Many banks and building societies require a lengthy amount of time remaining on a leasehold property before they will contemplate it as adequate security. Regardless of whether you need a mortgage, you should bear in mind that it is probable that someone wishing to buy your property in the future might well do, so where they are unable to obtain a mortgage, then the financial worth of the property will likely be adversely impacted. In the last decade many mortgage lenders have increased the required minimum lease length that they are prepared to accept
| Lender |
Requirement
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| Barclays plc |
Leases with less than 70 years at the commencement of the mortgage are not acceptable.
Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval:
• Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND
• The value of the property subject to the short remaining term is £500,000 or more AND
• The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing;
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| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| Chelsea 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.
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| 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 a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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What makes us experts in Eden Park lease extensions?
Lease extensions in Eden Park can be a difficult process. We recommend you procure professional help from a conveyancer and surveyor with experience in this area.
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 in-depth market knowledge dealing with Eden Park lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Eden Park Lease Extension Case Summaries:
Jodie, Eden Park, South East London,
Trailing protracted correspondence with the freeholder of her purpose-built apartment in Eden Park, Jodie started the lease extension process just as her lease was nearing the crucial 80-year threshold. The transaction completed in July 2006. The freeholder’s costs were kept to an absolute minimum.
Eden Park case:
In 2011 we were e-mailed by Dr T García who, having completed a garden apartment in Eden Park in May 2010. The dilemma was if we could estimate the premium would be for a ninety year lease extension. Comparable flats in Eden Park with a long lease were valued about £242,600. The mid-range amount of ground rent was £45 collected quarterly. The lease end date was in 2093. Having 67 years remaining we calculated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 not including expenses.
Decision in Bromley
An example of a Freehold Enfranchisement case for a Eden Park property is
26 Manor Road in July 2010. the Tribunal decided that price to be paid for the freehold was £12,420
This case was in relation to 2 flats. The number of years remaining on the existing lease(s) was 76.75 and 88.83.