Bethnal Green leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Bethnal Green residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Bethnal Green you would be well advised to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for decades to come.
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 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.
Following unsuccessful correspondence with the landlord of her two bedroom apartment in Bethnal Green, Grace commenced the lease extension process just as the lease was approaching the all-important eighty-year threshold. The transaction was concluded in September 2005. The freeholder’s fees were restricted to about 650 GBP.
Last month we were contacted by Mr and Mrs. P Cook , who moved into a garden apartment in Bethnal Green in June 2000. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Comparable flats in Bethnal Green with a long lease were valued about £174,200. The average ground rent payable was £55 collected monthly. The lease elapsed on 3 August 2077. Given that there were 51 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of legals.
An example of a Lease Extension decision for a Bethnal Green residence 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 affected 2 flats. The unexpired term was 72.39 years.