East Acton residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for decades to come.
| 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. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle East Acton 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 conveyancer we work with provide it.
Felix was the the leasehold owner of a high value flat in East Acton being marketed with a lease of a little over sixty years remaining. Felix on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Felix to exercise his statutory right. Felix procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Last Autumn we were e-mailed by Dr Y Gunderson , who took over the lease of a one bedroom apartment in East Acton in September 2002. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Similar homes in East Acton with an extended lease were worth £280,000. The mid-range ground rent payable was £55 invoiced annually. The lease finished on 20 August 2103. Taking into account 78 years left we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including costs.
An example of a Freehold Enfranchisement matter before the tribunal for a East Acton flat is 49 Long Drive in March 2014. The tribunal concluded that the price payable for the freehold interest in the Property should be £26,491 divided as to £12,546 in respect of the ground floor flat and £13,945 in respect of the first floor flat This case related to 2 flats. The unexpired lease term was 68.47 years.