The value of East London leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Lease extensions in East London can be a difficult process. We recommend you procure professional help from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with East London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last Spring Lewis, started to get near to the 80-year threshold with the lease on his ground floor flat in East London. Having purchased his flat two decades ago, the unexpired term was of minimal bearing. Luckily, he realised he needed to take steps soon on Extending the lease. Lewis was able to extend his lease just under the wire last January. Lewis and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If the lease had fallen below eighty years, the sum would have escalated by a minimum £925.
Last February we were approach by Ms Naomi Garcia , who completed a first floor flat in East London in January 1996. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Similar properties in East London with 100 year plus lease were valued about £210,600. The average ground rent payable was £45 invoiced per annum. The lease terminated in 2087. Having 62 years left we approximated the premium to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal 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 number of years remaining on the existing lease(s) was 73.26 years.