Havering leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Havering tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Havering you would be well advised to investigate if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Havering with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 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. |
Regardless of whether you are a tenant or a landlord in Havering,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Havering valuers.
Last year Harrison, started to get near to the 80-year mark with the lease on his ground floor flat in Havering. Having purchased his property two decades ago, the lease term was of no significance. by good luck, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Harrison arranged for a lease extension just ahead of time in June. Harrison and the freeholder in the end settled on an amount of £5,000 . If he not met the deadline, the sum would have escalated by a minimum £1,075.
Last month we were e-mailed by Mr and Mrs. A Mason , who owned a basement apartment in Havering in March 1997. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical homes in Havering with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease finished in 2097. Taking into account 71 years unexpired we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 plus fees.
An example of a Lease Extension decision for a Havering property is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case affected 1 flat. The unexpired lease term was 57.5 years.