With a residential leasehold premises in Limehouse, you are actually buying a right to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially when there are less than eighty years left. Anyone in Limehouse with a lease drawing near to 81 years remaining should seriously think of extending it without delay. Once a lease has less than 80 years outstanding, under the relevant Act the landlord is entitled to calculate and demand a larger amount, based on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Lease extensions in Limehouse can be a difficult process. We recommend you get professional help from a lawyer 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 Limehouse lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Alexander, came perilously close to the 80-year threshold with the lease on his purpose- built apartment in Limehouse. In buying his property 18 years previously, the length of the lease was of no significance. As luck would have it, it dawned on him that he would soon be paying an inflated amount for a lease extension. Alexander arranged for a lease extension just under the wire in May. Alexander and the landlord who owned the flat above ultimately settled on a premium of £5,500 . If he had missed the deadline, the amount would have become more exhorbitant by at least £1,050.
Dr Y Roberts owned a studio apartment in Limehouse in May 2004. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Limehouse with 100 year plus lease were valued about £200,000. The mid-range ground rent payable was £50 invoiced yearly. The lease ran out on 17 March 2103. Given that there were 78 years left we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal 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.