If you are facing a significant premium because your lease in Blackfen has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should commence your Blackfen lease extension today:
Increase your lease and increase your Blackfen property value
Blackfen leases on residential deteriorating in value. Where your lease has about ninety years left, you should start thinking about a lease extension. If lease term is under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Blackfen will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to confirm your eligibility. In some circumstances you may not qualify. There are prescribed timetables and procedures to comply with once the process is initiated so it’s prudent to be guided by a conveyancer during the process.
Blackfen property with a lease extension is almost the same value as a freehold
Leasehold properties in Blackfen with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
Banks and Building Societies may decide not to finance a property on a short lease
Lenders are really restricting their approach as regards to properties in Blackfen with short leases. For example you may find that their lending requirements are stricter and that they alter interest rates depending on the unexpired lease term. Some may even refuse to lend completely, so if you needed to sell, your remaining options would be to find a cash purchaser, or try your luck at auction thus narrowing the number of prospective purchasers.
| Lender |
Requirement
|
|---|
| Bank of Scotland |
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.
|
| Halifax |
Minimum 70 years from the date of the mortgage.
|
| TSB |
Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
What makes us experts in Blackfen lease extensions?
Regardless of whether you are a tenant or a landlord in Blackfen,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Blackfen valuers.
Blackfen Lease Extension Case Studies:
Gabriel, Blackfen, South East London,
Gabriel was the the leasehold proprietor of a conversion apartment in Blackfen being sold with a lease of a little over 61 years remaining. Gabriel on an informal basis approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to invoke his statutory right. Gabriel procured expert legal guidance and was able to make an informed decision and handle with the matter and sell the property.
Blackfen case:
In 2011 we were contacted by Mr and Mrs. O Morel who, having bought a newly refurbished apartment in Blackfen in April 2000. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparative homes in Blackfen with an extended lease were valued about £290,000. The average amount of ground rent was £60 collected yearly. The lease concluded in 2106. Given that there were 80 years outstanding we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.
Decision in Greenwich
An example of a Lease Extension decision for a Blackfen flat is
103a Footscray Road in January 2014. The tribunal determines that the premium payable for the extended
lease should be £34,500 according to the expert witness valuation
calculation
This case affected 1 flat.