The market value of a leasehold property in Havering is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for a lease extension before purchasing. It is ideal to start the lease extension process when the lease still has 82 years to run so that all matters can be finalised in advance of the 80 year threshold. Leasehold Reform legislation enables Havering qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Havering with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Lease extensions in Havering can be a difficult process. We recommend you obtain professional help from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Havering lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Ollie, came seriously close to the eighty-year mark with the lease on his one bedroom apartment in Havering. In buying his flat two decades ago, the lease term was of minimal relevance. As luck would have it, he became aware that he would imminently be paying an escalated premium for a lease extension. Ollie was able to extend his lease at the eleventh hour in June. Ollie and the freeholder subsequently settled on sum of £5,500 . If he failed to meet the deadline, the premium would have increased by a minimum £1,125.
In 2014 we were contacted by Mr Eli Nguyen who, having was assigned a lease of a one bedroom flat in Havering in September 2001. The dilemma was if we could approximate the price would be for a 90 year lease extension. Comparative residencies in Havering with a long lease were worth £216,000. The mid-range ground rent payable was £60 billed quarterly. The lease elapsed in 2083. Taking into account 58 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Havering premises 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 was in relation to 1 flat. The unexpired term as at the valuation date was 57.5 years.