Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Bethnal Green. Inevitably, the term of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the flat or house needs to be disposed of or re-mortgaged. 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 right to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. You should give due deliberation before delaying your Bethnal Green lease extension. Putting off that expense now simply increases the price you will eventually incur for a lease extension
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with procure 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 conveyancing solicitor we work with provide it.
Last year Henry, started to get near to the eighty-year mark with the lease on his one bedroom flat in Bethnal Green. In buying his home twenty years ago, the lease term was of no significance. Fortunately, it dawned on him that he would soon be paying way over the odds for Extending the lease. Henry was able to extend his lease just under the wire in September. Henry and the landlord who owned the flat above subsequently agreed on the final figure of £6,000 . If he not met the deadline, the amount would have gone up by a minimum £975.
Last Spring we were contacted by Mr Alfie Kelly , who bought a basement apartment in Bethnal Green in October 2008. We are asked if we could estimate the price could be for a 90 year extension to my lease. Comparable flats in Bethnal Green with 100 year plus lease were valued around £181,600. The average amount of ground rent was £55 collected per annum. The lease terminated in 2075. Taking into account 52 years as a residual term we estimated the premium to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of costs.
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 affected 2 flats. The unexpired residue of the current lease was 72.39 years.