Mile End leases on domestic properties are gradually losing value. if your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then be required to pay 50% 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 extra value that a lease extension will add to the property. Flat owners in Mile End will mostly qualify for a lease extension; however It would be wise to check with a conveyancing solicitor to confirm if you qualify. In certain cases you may not qualify. There are prescribed timetables and procedures to follow once the process is initiated so it’s best to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 lawyers that we work with undertake Mile End 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 conveyancer we work with provide it.
Elijah was the the leasehold proprietor of a studio apartment in Mile End on the market with a lease of a few days over 61 years left. Elijah on an informal basis approached his landlord a well known Manchester-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. No ground rent would be due on a lease extension were Elijah to exercise his statutory right. Elijah procured expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Dr Chantelle Rodríguez took over the lease of a basement apartment in Mile End in February 2004. The dilemma was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparative properties in Mile End with 100 year plus lease were in the region of £233,200. The mid-range amount of ground rent was £60 invoiced annually. The lease concluded in 2087. Taking into account 61 years unexpired we approximated the premium to the freeholder for the lease extension to be within £22,800 and £26,400 not including expenses.
An example of a Freehold Enfranchisement case for a Mile End residence 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.