When it comes to domestic leasehold property in Blackwall, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially when there are less than eighty years left. Leasehold owners in Blackwall with a lease approaching 81 years remaining should seriously think of extending it without delay. When a lease has below eighty years remaining, under the current Act the freeholder is entitled to calculate and levy a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold premises in Blackwall with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 landlord in Blackwall,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Blackwall valuers.
Sam owned a conversion flat in Blackwall being sold with a lease of a little over 61 years unexpired. Sam informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Sam to invoke his statutory right. Sam obtained expert advice and secured satisfactory deal without resorting to tribunal and readily saleable.
In 2012 we were called by Mr and Mrs. O Hernández who, having bought a basement flat in Blackwall in October 2000. We are asked if we could estimate the price would be for a ninety year extension to my lease. Comparative homes in Blackwall with an extended lease were valued about £249,200. The average amount of ground rent was £60 collected annually. The lease terminated on 21 July 2076. Having 51 years outstanding we calculated the premium to the freeholder to extend the lease to be within £42,800 and £49,400 not including legals.
An example of a Freehold Enfranchisement case for a Blackwall premises 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 related to 3 flats. The unexpired term as at the valuation date was 101.61 years.