Owning a flat usually means owning a lease of the property, which has a set term of years. your lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in East London. Inevitably, the period of lease remaining reduces as time goes by. This may pass by relatively unnoticed when the property needs to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Qualifying leaseholders in East London have the right to extend the lease for a further 90 years in accordance with statute. Please give careful attention before putting off your East London lease extension. Holding off the cost now only increases the price you will eventually incur for a lease extension
Leasehold residencies in East London with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance 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. |
| 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a landlord in East London,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with East London valuers.
Twenty four months ago Seth, came precariously near to the eighty-year threshold with the lease on his first floor apartment in East London. Having purchased his flat two decades ago, the unexpired term was of minimal relevance. Thankfully, he recognised he needed to take steps soon on Extending the lease. Seth extended the lease at the eleventh hour last July. Seth and the landlord ultimately agreed on a premium of £5,500 . If he not met the deadline, the premium would have escalated by a minimum £850.
Last year we were phoned by Mr and Mrs. A François , who bought a studio flat in East London in July 1995. The dilemma was if we could approximate the price could be for a 90 year extension to my lease. Identical premises in East London with an extended lease were in the region of £265,000. The mid-range ground rent payable was £55 billed per annum. The lease ended on 15 November 2099. Having 74 years remaining we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus expenses.
An example of a Freehold Enfranchisement case for a East London property 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 related to 1 flat. The unexpired lease term was 73.26 years.