When it comes to residential leasehold premises in Forest Gate, you are actually buying an entitlement to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than 80 years left. Anyone in Forest Gate with a lease nearing 81 years left should seriously consider extending it as soon as possible. Once a lease has below 80 years remaining, under the relevant statute the landlord is entitled to calculate and charge a greater amount, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold premises in Forest Gate with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Retaining our service gives you better control over the value of your Forest Gate leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago David, started to get close to the 80-year mark with the lease on his garden flat in Forest Gate. Having purchased his flat 19 years ago, the unexpired term was of no bearing. Luckily, he realised he would soon be paying way over the odds for Extending the lease. David was able to extend his lease just in the nick of time last March. David and the landlord eventually agreed on sum of £5,500 . If the lease had gone to less than 80 years, the sum would have gone up by a minimum £1,150.
Mr and Mrs. W Thomas was assigned a lease of a first floor flat in Forest Gate in July 2012. We are asked if we could estimate the price would be for a 90 year lease extension. Identical residencies in Forest Gate with an extended lease were worth £250,400. The average amount of ground rent was £65 collected yearly. The lease came to a finish in 2090. Given that there were 64 years left we approximated the premium to the landlord for the lease extension to be between £19,000 and £22,000 plus expenses.
An example of a Freehold Enfranchisement decision for a Forest Gate flat is 52 & 54 Green Street in February 2010. Following a vesting order by the County Court the Tribunal decided that the price that the Applicant for the freehold interest should pay is £20,543 This case was in relation to 2 flats. The unexpired term as at the valuation date was 78 and 80.