For those whose Fairlop home is held on a long lease, our message is clear – if no remedial action is taken, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle Fairlop 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 lawyer we work with provide it.
In recent months Aaron, came dangerously near to the eighty-year threshold with the lease on his ground floor flat in Fairlop. Having bought his property two decades ago, the length of the lease was of minimal interest. by good luck, he recognised he needed to take steps soon on a lease extension. Aaron arranged for a lease extension just in the nick of time last April. Aaron and the landlord who owned the flat above eventually agreed on the final figure of £6,000 . If the lease had descended below eighty years, the price would have escalated by a minimum £850.
In 2012 we were contacted by Mr and Mrs. J François who, having was assigned a lease of a ground floor apartment in Fairlop in March 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Fairlop with an extended lease were valued around £254,200. The average amount of ground rent was £60 collected yearly. The lease elapsed in 2077. Considering the 51 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £43,700 and £50,600 not including professional charges.
An example of a Lease Extension decision for a Fairlop residence is 104 Coventry Road in July 2014. The Tribunal determined that the lease extension permium should be £22,896.15 This case was in relation to 1 flat. The unexpired lease term was 60.29 years.