If you are facing a significant premium because your lease in East Sheen has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your East Sheen lease extension today:
A East Sheen leasehold property depreciates with the years remaining on the lease.
Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in East Sheen. Inevitably, the length of lease left shortens as time goes by. This is often ignored and only raises itself as an issue when the flat or house has 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. Eligible long lease owners in East Sheen have the legal entitlement to extend the lease for an additional 90 years in accordance with statute. Do give careful deliberation before putting off your East Sheen lease extension. Putting off the cost now only increases the price you will ultimately have to pay to extend your lease
East Sheen property with a lease extension is almost the same value as a freehold
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
Lenders may decide not to lend on a short lease
Nearly all banks and building societies insist on a lengthy amount of time remaining on any leasehold property before they will consider it as adequate security. Regardless of whether you require a mortgage, you should keep in mind that it is probable that someone wanting to purchase your property in the future might well do, so where they are unable to secure a mortgage, then the value of your property could suffer. In the last decade most mortgage lenders have increased the required minimum lease length that they are willing to lend on
| Lender |
Requirement
|
|---|
| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
|
| Halifax |
Minimum 70 years from the date of the mortgage.
|
| Skipton Building Society |
85 years from the date of completion of the mortgage
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
|
Get in touch with one of our East Sheen lease extension solicitors or enfranchisement solicitors
Lease extensions in East Sheen can be a difficult process. We recommend you obtain 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 in-depth market knowledge dealing with East Sheen lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
East Sheen Lease Extension Case Studies:
Liam, East Sheen, South West London,
Liam owned a studio apartment in East Sheen being sold with a lease of a little over 72 years remaining. Liam on an informal basis contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Liam to invoke his statutory right. Liam obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and sell the property.
East Sheen case:
Last year we were contacted by Mr Blake Morel , who
was assigned a lease of a purpose-built flat in East Sheen in May 1995. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparative premises in East Sheen with 100 year plus lease were valued about £166,400. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease expired in 2080. Having 54 years as a residual term we approximated the premium to the landlord for the lease extension to be between £32,300 and £37,400 not including costs.
Decision in Wandsworth
An example of a Freehold Enfranchisement decision for a East Sheen residence is
19 St. Margarets Crescent in August 2010. the tribunal was of the view that the premium to be paid by the
leaseholder for the freehold reversion was £51,983.00
This case was in relation to 3 flats. The remaining number of years on the lease was 66.25 years.