When it comes to domestic leasehold premises in Limehouse, you are actually buying an entitlement to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Leasehold owners in Limehouse with a lease approaching 81 years remaining should seriously think of extending it sooner rather than later. When the lease term has under 80 years left, under the current legislation the landlord is entitled to calculate and charge a larger amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold properties in Limehouse with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘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 to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| 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. |
Retaining our service gives you increased control over the value of your Limehouse leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last October Benjamin, came critically near to the 80-year mark with the lease on his purpose- built flat in Limehouse. Having purchased his property two decades ago, the length of the lease was of little bearing. As luck would have it, he realised he needed to take action soon on Extending the lease. Benjamin was able to extend his lease just ahead of time last August. Benjamin and the freeholder eventually settled on a premium of £5,500 . If the lease had descended lower than eighty years, the sum would have increased by a minimum £950.
In 2009 we were approached by Mr E Taylor who, having acquired a newly refurbished flat in Limehouse in November 2009. The dilemma was if we could estimate the premium would be to extend the lease by an additional years. Identical homes in Limehouse with an extended lease were in the region of £201,200. The average ground rent payable was £55 invoiced per annum. The lease expiry date was on 5 January 2082. Taking into account 56 years left we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus professional charges.
An example of a Freehold Enfranchisement decision for a Limehouse property is 26 Rhondda Grove in June 2009. The net price payable by the leaseholders as determined by the Tribunal was £3,015.13. This comprised £11,300 premium for the reversion less £8,284.87 costs as ordered by the County Court.