The closer a residential lease in East London nears to zero years unexpired, the more it reduces the value of the property. Where the residual term has, in excess of 99 years to run then this decrease may be fractional nevertheless there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary logic behind why you should extend the lease sooner as opposed to later. The majority of flat owners in East London will qualify for this right; nevertheless a conveyancer can confirm if you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
The conveyancers that we work with handle 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.
Trailing protracted correspondence with the freeholder of her studio flat in East London, Molly commenced the lease extension process as the eighty year deadline was rapidly coming. The lease extension completed in March 2009. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. T Thomas bought a garden flat in East London in August 2009. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparative residencies in East London with a long lease were worth £242,600. The mid-range amount of ground rent was £45 invoiced per annum. The lease termination date was on 25 November 2092. Considering the 67 years outstanding we calculated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 plus professional charges.
An example of a Freehold Enfranchisement decision 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 affected 1 flat. The unexpired term was 73.26 years.