There is no doubt about it a leasehold property in Avery Hill is a wasting asset as a result of the diminishing lease term. Where the lease has, in excess of 100 years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. Many flat owners in Avery Hill will qualify for this right; that being said a lawyer can confirm if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold premises in Avery Hill with more than 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Engaging our service will provide you increased control over the value of your Avery Hill leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Leo owned a high value apartment in Avery Hill on the market with a lease of a few days over 61 years remaining. Leo on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Leo to exercise his statutory right. Leo procured expert advice and secured satisfactory resolution informally and readily saleable.
In 2014 we were approached by Mr Mason González who, having was assigned a lease of a garden flat in Avery Hill in October 2007. The question was if we could estimate the premium could be to prolong the lease by a further 90 years. Identical flats in Avery Hill with 100 year plus lease were worth £275,000. The average amount of ground rent was £55 billed per annum. The lease ended in 2101. Considering the 76 years outstanding we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus costs.
An example of a Lease Extension matter before the tribunal for a Avery Hill premises is 103a Footscray Road in January 2014. The tribunal determines that the premium payable for the extended lease should be £34,500 according to the expert witness valuation calculation This case related to 1 flat.