Mile End leases on domestic deteriorating in value. Where your lease has about 90 years unexpired, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease drops below this level then you begin paying an additional element called marriage value. Leasehold owners in Mile End will mostly be legally entitled to a lease extension; however a solicitor should be able check your eligibility. In certain situations you may not be entitled. There are also strict deadlines and steps to follow once the process is triggered so it’s sensible to be guided by a conveyancer during the process.
Leasehold residencies in Mile End with more than 100 years outstanding 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 home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Mile End,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mile End valuers.
Caleb was the the leasehold proprietor of a high value apartment in Mile End being marketed with a lease of a few days over sixty years unexpired. Caleb informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Caleb to invoke his statutory right. Caleb obtained expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2009 we were called by Mr Charlie Howard who, having acquired a newly refurbished flat in Mile End in July 2005. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative properties in Mile End with a long lease were worth £210,000. The average ground rent payable was £50 collected annually. The lease concluded in 2106. Considering the 80 years outstanding we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.
An example of a Freehold Enfranchisement decision for a Mile End property is 26 Rhondda Grove in June 2009. The net price payable by the leaseholders as determined by the Tribunal was £3,015.13. This comprised £11,300 premium for the reversion less £8,284.87 costs as ordered by the County Court.