When it comes to residential leasehold premises in Highams Park, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than 80 years remaining. Leasehold owners in Highams Park with a lease nearing 81 years remaining should seriously think of extending it as soon as possible. Once the lease term has less than 80 years outstanding, under the current Act the landlord is entitled to calculate and demand a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 conveyancers that we work with handle Highams Park 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 lawyer we work with provide it.
Ali owned a 2 bedroom flat in Highams Park being marketed with a lease of just over 72 years unexpired. Ali on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Ali to invoke his statutory right. Ali obtained expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
In 2014 we were e-mailed by Mr and Mrs. U Cox who, having owned a one bedroom apartment in Highams Park in May 2007. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical flats in Highams Park with 100 year plus lease were in the region of £198,800. The average amount of ground rent was £55 invoiced every twelve months. The lease terminated on 13 June 2080. Given that there were 55 years remaining we estimated the premium to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.
An example of a Freehold Enfranchisement case for a Highams Park property is 48 Greenleaf Road in December 2009. the lessees sought to exercise their right to purchase the freehold from the landlord by way of collective enfranchisement in accordance with the Leasehold Reform Housing and Urban Development Act 1993.The landlord could not be found.A vesting order was granted from the Bow County Court on 10 September 2007 (Claim No: 8BO04141). The Tribunal held that the premium to be paid was £3,850 This case was in relation to 2 flats. The unexpired term as at the valuation date was 104 years.