Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Bethnal Green. Clearly, the term of lease left shortens as time goes by. This is often overlooked and only raises itself as an issue when the flat or house needs to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible long lease owners in Bethnal Green have the legal entitlement to extend the lease for a further 90 years under statute. Do give due deliberation before delaying your Bethnal Green lease extension. Putting off the cost now only increases the price you will ultimately have to pay to extend your lease
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
The conveyancing solicitors that we work with handle Bethnal Green lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last Winter Milo, came very close to the eighty-year threshold with the lease on his first floor flat in Bethnal Green. In buying his flat two decades ago, the length of the lease was of minimal significance. Thankfully, he became aware that he needed to take action soon on a lease extension. Milo extended the lease just ahead of time in April. Milo and the landlord eventually agreed on the final figure of £6,000 . If the lease had slid below 80 years, the amount would have increased by at least £950.
Mrs V Murphy took over the lease of a ground floor flat in Bethnal Green in August 2008. The dilemma was if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparable premises in Bethnal Green with a long lease were valued around £198,800. The mid-range ground rent payable was £55 billed every twelve months. The lease elapsed in 2081. Considering the 55 years unexpired we calculated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 exclusive of expenses.
An example of a Lease Extension decision for a Bethnal Green property is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The unexpired lease term was 72.39 years.