As the length of the unexpired term of a East London residential lease lessens so does its value and therefore the value of your property. If the residual term has, in excess of 99 years to run then this decrease may be of little impact however there will become a stage when a lease has less than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. Many flat owners in East London will meet the qualifying criteria; that being said a lawyer should be able to advise whether you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold premises in East London with more than 100 years outstanding on the lease are often 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 upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with procure East London 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.
Last Christmas David, started to get near to the eighty-year threshold with the lease on his two bedroom apartment in East London. Having purchased his flat 18 years ago, the unexpired term was of little relevance. Fortunately, it dawned on him that he needed to take action soon on a lease extension. David arranged for a lease extension just under the wire in September. David and the landlord who owned the flat above eventually settled on the final figure of £5,500 . If he not met the deadline, the price would have become more exhorbitant by a minimum £925.
In 2014 we were phoned by Mrs N López who, having bought a garden apartment in East London in August 2006. The dilemma was if we could estimate the price could be for a ninety year lease extension. Similar flats in East London with a long lease were worth £275,000. The average ground rent payable was £55 invoiced per annum. The lease expired on 7 October 2102. Taking into account 76 years left we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
An example of a Freehold Enfranchisement case for a East London residence is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case was in relation to 1 flat. The unexpired term as at the valuation date was 73.26 years.