Beckton residential property owned on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
Leasehold properties in Beckton with in excess of 100 years left on the lease are often referred to as ‘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 buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 gives you increased control over the value of your Beckton leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Finn was the the leasehold owner of a 2 bedroom flat in Beckton being sold with a lease of fraction over 72 years unexpired. Finn informally approached his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Finn to invoke his statutory right. Finn obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2014 we were phoned by Ms Rachel Sharif who, having was assigned a lease of a studio flat in Beckton in June 2011. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Identical properties in Beckton with 100 year plus lease were in the region of £270,000. The average amount of ground rent was £55 collected per annum. The lease termination date was on 23 June 2101. Given that there were 75 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.
An example of a Lease Extension case for a Beckton premises is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The remaining number of years on the lease was 69.77 years.