Great Baddow Lease Extension - Free Consultation

Before you progress with your lease extension in Great Baddow
Get a quote from one of our lease extension experts with over 20 years experience.

Let them guide you for FREE on the various options available to you.

It may end up saving you thousands.

Why you should commence your Great Baddow lease extension


Top reasons for lease extension now:

A Great Baddow lease depreciates with the years remaining on the lease.

With a long leasehold property in Great Baddow, you effectively rent it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than 80 years remaining. Anyone in Great Baddow with a lease drawing near to 81 years remaining should seriously consider extending it without delay. Once a lease has below eighty years outstanding, under the relevant statute the landlord is entitled to calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.

Great Baddow property with a lease extension has roughly the same value as a freehold

It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.

Lenders will not lend on a short lease

The propensity since over the last decade has been for lenders to tighten lending requirements across the board - this has extended to the property over which the mortgage is to be charged. This has meant the minimum number of years remaining under the lease required by lenders has increased. In the past banks would grant a mortgage on a lease with 25 years plus the term of the loan - typically 50 year leases but those requirements evolved by the requirement for lengthy leases - many now have a minimum term of 75 years as standard.

Lender Requirement
Bank of Scotland Minimum 70 years from the date of the mortgage.
Barclays plc Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).

Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.

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;
Barnsley Building Society 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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.
Nationwide Building Society - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

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
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.

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 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- 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 is 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 55 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% 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 (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- 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 (does not apply to Shared Ownership)
- 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 charged which is more than on a peppercorn basis

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% 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 Issuing Office.

Why use us for your lease extension in Great Baddow?

Regardless of whether you are a tenant or a freeholder in Great Baddow,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Great Baddow valuers.

Great Baddow Lease Extension Example Cases:

Ethan, Great Baddow, Essex

Two years ago Ethan, came precariously close to the 80-year threshold with the lease on his studio apartment in Great Baddow. In buying his home twenty years previously, the lease term was of no significance. by good luck, he recognised he would imminently be paying way over the odds for Extending the lease. Ethan extended the lease just in the nick of time in April. Ethan and the freeholder via the management company eventually agreed on a premium of £5,500 . If he not met the deadline, the price would have become more exhorbitant by at least £900.

Great Baddow case:

In 2013 we were e-mailed by Dr Imogen Roberts who, having completed a studio apartment in Great Baddow in August 2011. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Comparative residencies in Great Baddow with 100 year plus lease were valued about £215,600. The mid-range amount of ground rent was £45 invoiced per annum. The lease expired on 19 August 2086. Considering the 62 years remaining we calculated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 not including fees.

Great Baddow case:

Mr and Mrs. S Moreau completed a basement flat in Great Baddow in July 2008. The question was if we could estimate the premium would be for a 90 year extension to my lease. Identical homes in Great Baddow with a long lease were valued about £265,000. The average amount of ground rent was £50 billed annually. The lease expired on 2 February 2097. Given that there were 73 years as a residual term we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.