The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Forest Gate have the legal entitlement to extend the lease for a further ninety years under Leasehold Reform legislation. Do think carefully before delaying your Forest Gate lease extension. Postponing that expense now simply escalates the amount you will ultimately have to pay to extend the lease.
Leasehold residencies in Forest Gate with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake 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 conveyancing solicitor we work with provide it.
Two years ago Liam, started to get near to the 80-year mark with the lease on his basement flat in Forest Gate. In buying his flat 19 years ago, the length of the lease was of no interest. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Liam arranged for a lease extension just in the nick of time in March. Liam and the freeholder via the management company in the end settled on sum of £5,500 . If the lease had fallen below eighty years, the amount would have escalated by a minimum £1,150.
In 2012 we were phoned by Mr and Mrs. O Martínez who, having took over the lease of a recently refurbished apartment in Forest Gate in July 2000. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparative homes in Forest Gate with a long lease were valued about £295,000. The mid-range amount of ground rent was £50 billed annually. The lease ended on 1 July 2100. Considering the 75 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus legals.
An example of a Freehold Enfranchisement case for a Forest Gate residence 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 was in relation to 2 flats. The unexpired lease term was 78 and 80.