The re-sale value of a leasehold property in Bethnal Green is impacted by how many years the lease has remaining. If it is near to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when the lease still has 82 years remaining so that all matters can be addressed ahead of the 80 year threshold. Current legislation entitles Bethnal Green qualifying lessees to an additional term of 90 years over and above the existing term, at a peppercorn rent (no ground rent). The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Bethnal Green,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 experience and the close ties they enjoy with Bethnal Green valuers.
After protracted negotiations with the freeholder of her first floor apartment in Bethnal Green, Charlotte started the lease extension process just as her lease was coming close to the critical eighty-year mark. The transaction completed in August 2008. The freeholder’s costs were kept to an absolute minimum.
Last year we were contacted by Mrs B Turner , who acquired a newly refurbished flat in Bethnal Green in October 2010. The question was if we could approximate the premium would likely be for a 90 year lease extension. Similar flats in Bethnal Green with a long lease were worth £295,000. The mid-range amount of ground rent was £45 collected quarterly. The lease ran out in 2100. Taking into account 74 years remaining we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Bethnal Green premises 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.