The market value of Greenwich leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate substantially once the unexpired lease term is below than 80 years
Leasehold properties in Greenwich with in excess of one hundred years unexpired 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with undertake Greenwich 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 conveyancing solicitor we work with provide it.
In recent months Max, came critically near to the 80-year threshold with the lease on his leasehold apartment in Greenwich. In buying his flat two decades ago, the length of the lease was of little significance. As luck would have it, he became aware that he would imminently be paying an escalated premium for Extending the lease. Max was able to extend his lease just in the nick of time last August. Max and the freeholder via the management company subsequently agreed on a premium of £5,500 . If he not met the deadline, the premium would have escalated by a minimum £1,125.
Last Christmas we were contacted by Mr and Mrs. W Nelson , who took over the lease of a ground floor apartment in Greenwich in February 1996. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical flats in Greenwich with a long lease were in the region of £200,800. The average ground rent payable was £65 collected per annum. The lease ran out in 2086. Considering the 60 years left we approximated the premium to the landlord to extend the lease to be between £20,900 and £24,200 plus fees.
An example of a Lease Extension decision for a Greenwich premises is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case related to 2 flats. The remaining number of years on the lease was 72 years.