For anyone whose Goodmayes home is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
Leasehold premises in Goodmayes with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 lawyers that we work with undertake Goodmayes 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.
Last year Logan, started to get near to the 80-year threshold with the lease on his leasehold apartment in Goodmayes. Having bought his home two decades ago, the length of the lease was of no importance. by good luck, he became aware that he would soon be paying way over the odds for a lease extension. Logan extended the lease at the eleventh hour last September. Logan and the freeholder ultimately agreed on sum of £6,000 . If he had missed the deadline, the premium would have gone up by a minimum £1,150.
In 2012 we were contacted by Dr R Vincent who, having completed a ground floor apartment in Goodmayes in March 2012. The question was if we could approximate the premium would be to extend the lease by an additional years. Comparative premises in Goodmayes with an extended lease were valued about £174,200. The mid-range ground rent payable was £55 invoiced quarterly. The lease terminated on 25 May 2077. Given that there were 51 years remaining we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 plus expenses.
An example of a Lease Extension decision for a Goodmayes premises is 49 Aldborough Road South in July 2012. The Tribunal decided that the premium payable for the grant of the new lease was £13,925 This case was in relation to 1 flat. The remaining number of years on the lease was 61.36 years.