Unfortunately that a Blackwall 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 early years due to the depreciation being disguised by increases in the Blackwall property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining dips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Blackwall will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold properties in Blackwall with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you increased control over the value of your Blackwall leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Evan, came precariously near to the eighty-year threshold with the lease on his leasehold flat in Blackwall. In buying his property 18 years previously, the unexpired term was of no interest. Fortunately, he realised he needed to take steps soon on a lease extension. Evan extended the lease at the eleventh hour in June. Evan and the freeholder via the management company subsequently settled on sum of £6,000 . If he had missed the deadline, the amount would have escalated by a minimum £875.
Last year we were called by Dr Liam Mitchell , who moved into a one bedroom apartment in Blackwall in August 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative premises in Blackwall with 100 year plus lease were valued about £261,600. The mid-range amount of ground rent was £60 invoiced annually. The lease finished in 2078. Given that there were 52 years left we estimated the premium to the landlord to extend the lease to be within £39,000 and £45,000 not including professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Blackwall flat is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case affected 3 flats. The unexpired residue of the current lease was 101.61 years.