The nearer a domestic lease in Limehouse gets to zero years unexpired, the the greater the reduction in the value of the property. Where the lease has, in excess of one hundred years remaining then this decrease may be negligible however there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary reason why you should consider extending without delay. Most flat owners in Limehouse will qualify for this right; nevertheless a conveyancer can confirm whether you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 conveyancers that we work with handle Limehouse 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 conveyancer we work with provide it.
Last Christmas Rory, started to get close to the eighty-year threshold with the lease on his first floor flat in Limehouse. Having purchased his flat two decades ago, the lease term was of no importance. by good luck, he noticed he would imminently be paying an escalated premium for a lease extension. Rory was able to extend his lease just in the nick of time in March. Rory and the landlord subsequently settled on the final figure of £6,000 . If he failed to meet the deadline, the amount would have gone up by a minimum £925.
In 2010 we were contacted by Dr Jennifer Clarke who, having purchased a purpose-built apartment in Limehouse in May 2006. The question was if we could estimate the price would be for a ninety year lease extension. Similar residencies in Limehouse with a long lease were valued around £285,000. The average ground rent payable was £45 invoiced monthly. The lease terminated in 2098. Considering the 72 years unexpired we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.
An example of a Freehold Enfranchisement decision for a Limehouse residence 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.