If you are facing a significant premium because your lease in Great Baddow 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.
Top reasons for lease extension now:
Increase your lease and increase your Great Baddow property value
The closer a domestic lease in Great Baddow gets to zero years unexpired, the more it reduces the value of the property. Where the residual term has, more than 125 years to run then this decrease may be fractional that being said there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease without delay. Most flat owners in Great Baddow will qualify for this right; however a conveyancer can confirm if you qualify to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Great Baddow property with a lease extension has roughly the same value as a freehold
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be worth the same as a freehold for decades to come.
Mortgage lenders may decide not to issue a mortgage on a short lease
Nearly all banks and building societies will not grant a mortgage on a lease with less than seventy years remaining - although this varies between mortgage companies. A purchaser will undoubtedly encounter difficulties in obtaining a mortgage and this could result in your Great Baddow property becoming difficult to sell or refinance.
| Lender |
Requirement
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| Bank of Scotland |
Minimum 70 years from the date of the mortgage.
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| 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.
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| Leeds Building Society |
85 years remaining from the start of the mortgage.
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| Nationwide Building Society |
- Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
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
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
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 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- 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 is 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 55 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% 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 (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- 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 (does not apply to Shared Ownership)
- 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 charged which is more than on a peppercorn basis
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% 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.
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| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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Why use us for your lease extension in Great Baddow?
Regardless of whether you are a tenant or a landlord in Great Baddow,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Great Baddow valuers.
Great Baddow Lease Extension Example Cases:
Dexter, Great Baddow, Essex
In 2014 Dexter, started to get close to the eighty-year threshold with the lease on his one bedroom flat in Great Baddow. Having bought his flat two decades ago, the lease term was of minimal relevance. Thankfully, he noticed he would soon be paying an inflated amount for a lease extension. Dexter extended the lease just in the nick of time last September. Dexter and the freeholder ultimately agreed on an amount of £5,500 . If he not met the deadline, the amount would have gone up by at least £1,075.
Great Baddow case:
Mr I Campbell took over the lease of a ground floor apartment in Great Baddow in May 2006. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Similar residencies in Great Baddow with an extended lease were valued around £210,600. The mid-range ground rent payable was £45 billed yearly. The lease terminated on 19 April 2088. Having 62 years left we approximated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 plus fees.
Great Baddow case:
In 2013 we were e-mailed by Mr and Mrs. P Rivera who, having moved into a studio flat in Great Baddow in April 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Comparative properties in Great Baddow with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 invoiced annually. The lease elapsed on 22 July 2099. Considering the 73 years remaining we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including expenses.