Unfortunately that a Blackheath residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Blackheath property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Blackheath will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally accepted that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Blackheath,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Blackheath valuers.
In 2014 Austin, started to get near to the eighty-year threshold with the lease on his garden flat in Blackheath. Having bought his flat two decades ago, the lease term was of minimal importance. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Austin arranged for a lease extension just under the wire in August. Austin and the freeholder via the managing agents in the end agreed on sum of £6,000 . If the lease had fallen lower than eighty years, the figure would have gone up by at least £875.
In 2013 we were e-mailed by Mr and Mrs. P Parker who, having bought a first floor apartment in Blackheath in November 2004. The dilemma was if we could approximate the price could be to prolong the lease by a further 90 years. Similar homes in Blackheath with 100 year plus lease were valued about £264,000. The average amount of ground rent was £60 invoiced annually. The lease concluded in 2078. Given that there were 53 years unexpired we estimated the premium to the landlord for the lease extension to be within £37,100 and £42,800 plus costs.
An example of a Lease Extension matter before the tribunal for a Blackheath residence is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case related to 2 flats. The unexpired lease term was 72 years.