Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Lansbury. Inevitably, the period of lease left reduces over time. This may pass by relatively unnoticed when the flat or house needs to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension. Qualifying leaseholders in Lansbury have the legal entitlement to extend the lease for a further ninety years under Leasehold Reform legislation. Please give due deliberation before delaying your Lansbury lease extension. Putting off that expense now simply increases the price you will ultimately incur for a lease extension
Leasehold properties in Lansbury with over one hundred years outstanding on the lease are often 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 justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Lansbury,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Lansbury valuers.
Eli owned a 2 bedroom apartment in Lansbury on the market with a lease of just over 72 years unexpired. Eli informally approached his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Eli to invoke his statutory right. Eli procured expert legal guidance and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
In 2014 we were contacted by Dr Phoebe Davis who, having was assigned a lease of a purpose-built flat in Lansbury in May 2001. The question was if we could approximate the premium would likely be to extend the lease by a further 90 years. Similar flats in Lansbury with an extended lease were worth £290,000. The average amount of ground rent was £45 billed monthly. The lease came to a finish in 2099. Given that there were 73 years unexpired we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.
An example of a Vesting Order and Purchase of freehold matter before the tribunal for a Lansbury premises is Ground Floor Flat 4A Baronet Road in February 2010. Following a vesting order by Edmonton County Court on 23rd December 2008 (case number 8ED064) the Tribunal decided that the price that the Applicant for the freehold interest should pay is £8,689.00 This case was in relation to 2 flats. The unexpired term as at the valuation date was 80.01 years.