Mile End leases on residential properties are gradually losing value. if your lease has in the region of ninety years remaining, you should start thinking about a lease extension. If lease term is under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Mile End will usually qualify for a lease extension; however It would be wise to check with a conveyancer to check if you qualify. In some situations you may not qualify. There are also strict deadlines and steps to follow once the process has commenced so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 | 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:
|
| 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. |
Using our service will provide you increased control over the value of your Mile End leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy correspondence with the freeholder of her first floor flat in Mile End, Abigail initiated the lease extension process just as her lease was approaching the critical 80-year deadline. The lease extension was finalised in July 2013. The landlord’s fees were kept to an absolute minimum.
In 2013 we were phoned by Mrs Lucy Taylor who, having owned a one bedroom apartment in Mile End in September 2004. The question was if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar flats in Mile End with an extended lease were in the region of £205,000. The average ground rent payable was £50 invoiced yearly. The lease expired in 2104. Having 78 years left we calculated the compensation to the freeholder to extend the lease to be within £7,600 and £8,800 not including legals.
An example of a Freehold Enfranchisement case for a Mile End flat 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.