On the balance of probabilities where you own a flat in Forest Gate you actually own a long leasehold interest over your property
Leasehold residencies in Forest Gate with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle Forest Gate lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Kai owned a 2 bedroom apartment in Forest Gate on the market with a lease of a little over 61 years unexpired. Kai on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Kai to invoke his statutory right. Kai obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
In 2009 we were phoned by Mr and Mrs. T Ricardo who, having completed a first floor flat in Forest Gate in February 2004. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparative properties in Forest Gate with an extended lease were valued around £233,200. The mid-range amount of ground rent was £60 invoiced annually. The lease elapsed on 24 October 2086. Considering the 61 years as a residual term we calculated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus professional charges.
An example of a Freehold Enfranchisement case for a Forest Gate property is 52 & 54 Green Street in February 2010. Following a vesting order by the County Court the Tribunal decided that the price that the Applicant for the freehold interest should pay is £20,543 This case affected 2 flats. The unexpired lease term was 78 and 80.