It’s an underpublicised truth that a New Cross residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the New Cross property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher premium will be due. Most flat owners in New Cross will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally considered that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
Regardless of whether you are a tenant or a landlord in New Cross,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with New Cross valuers.
In the wake of 9 months of protracted correspondence with the freeholder of her leasehold flat in New Cross, Lucy initiated the lease extension process as the 80 year mark was swiftly nearing. The lease extension was finalised in August 2014. The freeholder’s costs were kept to an absolute minimum.
Dr Joshua Green completed a purpose-built apartment in New Cross in August 2001. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Comparative flats in New Cross with an extended lease were worth £300,000. The mid-range ground rent payable was £50 collected yearly. The lease expired in 2101. Having 76 years outstanding we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus costs.
An example of a Freehold Enfranchisement case for a New Cross property is 41 Endwell Road in March 2013. this matter relateed to the acquisition of the freehold of a mid- terraced Victorian house converted into three separate self-contained dwellings. By an order dated 28/11/2012, Deputy District Judge Cole in the Bromley County Court held that the leaseholders were entitled to acquire the freehold and directed that the premium payable be determined by this Tribunal. The Tribunal assessed the premium to be £14,753 This case related to 3 flats. The unexpired term as at the valuation date was 80.01 years.