Becontree leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Becontree residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Becontree you really ought to see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Becontree with over 100 years outstanding 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 to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Becontree can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Becontree lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ethan owned a conversion apartment in Becontree being sold with a lease of just over sixty years outstanding. Ethan informally contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £200 per annum. No ground rent would be due on a lease extension were Ethan to invoke his statutory right. Ethan procured expert advice and was able to make an informed decision and handle with the matter and readily saleable.
Mr and Mrs. U Walker acquired a purpose-built apartment in Becontree in February 1999. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Similar residencies in Becontree with an extended lease were worth £255,000. The average amount of ground rent was £50 collected every twelve months. The lease terminated in 2095. Given that there were 70 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Becontree premises is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case was in relation to 1 flat. The unexpired residue of the current lease was 61.36 years.