Unfortunately that a Beckton residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Beckton property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Beckton will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally accepted that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Beckton,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 Beckton valuers.
Off the back of lengthy negotiations with the freeholder of her basement apartment in Beckton, Rachael commenced the lease extension process as the eighty year threshold was fast advancing. The lease extension was finalised in February 2013. The freeholder’s costs were negotiated to less than 450 GBP.
In 2010 we were approached by Ms Samantha Moore who, having purchased a ground floor flat in Beckton in September 1996. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable premises in Beckton with 100 year plus lease were valued around £186,000. The mid-range amount of ground rent was £65 billed monthly. The lease terminated in 2083. Taking into account 58 years unexpired we calculated the compensation to the landlord for the lease extension to be between £26,600 and £30,800 exclusive of professional charges.
An example of a Lease Extension matter before the tribunal 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 unexpired term was 69.77 years.