If you are facing a significant premium because your lease in Vauxhall has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Vauxhall leasehold property depreciates with the years remaining on the lease.
Vauxhall leases on domestic deteriorating in value. if your lease has about 90 years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for a lease extension to take place before the term of the current lease falls lower than 80 years - otherwise a higher premium will be due. Flat owners in Vauxhall will mostly qualify for a lease extension; however a solicitor will check your eligibility. In certain cases you may not be entitled. There are also strict timetables and procedures to comply with once the process is triggered so it’s wise to be guided by a conveyancing solicitor during the process.
An extended lease is almost the same value as a freehold
Leasehold properties in Vauxhall with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
Lenders may decide not to grant a mortgage with a short lease
Whether or not the lease is be regarded as a short lease varies by mortgage company, yet lending institutions start to get concerned at around 75 years. This may cause difficulties as and when you wish to dispose of or remortgage your flat as it will be effectively unmortgageable. You may have no imminent desire to sell but when you do your buyer will need to hold off for 2 years before being able to initiate the legal procedures for an extension to the lease.
| Lender |
Requirement
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| Bank of Scotland |
Minimum 70 years from the date of the mortgage.
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| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| Coventry Building Society |
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.
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| Leeds Building Society |
85 years remaining from the start of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Why use us for your lease extension in Vauxhall?
Using our service gives you enhanced control over the value of your Vauxhall leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell.
The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Vauxhall Lease Extension Case Studies:
Lily, Vauxhall, South London,
Trailing protracted correspondence with the freeholder of her two bedroom apartment in Vauxhall, Lily started the lease extension process just as the lease was coming close to the crucial eighty-year threshold. The lease extension was finalised in August 2015. The landlord’s costs were kept to an absolute minimum.
Vauxhall case:
Last Autumn we were phoned by Dr A Roberts , who
was assigned a lease of a studio apartment in Vauxhall in February 2007. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparative properties in Vauxhall with a long lease were valued around £210,000. The mid-range ground rent payable was £50 billed yearly. The lease ended on 3 October 2106. Taking into account 80 years remaining we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including legals.
Decision in Westminster
An example of a Lease Extension matter before the tribunal for a Vauxhall flat is
Flats 12A & 19, Evelyn Mansions Carlisle Place in June 2009. The Tribunal held that the price to be paid for the new lease of Flat 12A is £168,824, For the other flat the price was set at £169,110
This case affected 2 flats. The unexpired residue of the current lease was 56 years.