Little Ilford residential property held on a long lease is a wasting asset because a leaseholder only owns the property for a period of years.
It is generally considered that a residential leasehold with more than 100 years remaining is worth roughly the equivalent 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 decades to come.
| 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. |
| Coventry Building Society | 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. |
| Halifax | 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. |
| 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 will provide you enhanced control over the value of your Little Ilford leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
William owned a studio apartment in Little Ilford being marketed with a lease of just over 61 years left. William on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were William to invoke his statutory right. William obtained expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Last Autumn we were e-mailed by Mr and Mrs. E Mercier , who acquired a one bedroom flat in Little Ilford in November 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Similar residencies in Little Ilford with a long lease were in the region of £270,000. The mid-range ground rent payable was £65 collected monthly. The lease concluded on 2 February 2093. Given that there were 68 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including fees.
An example of a Freehold Enfranchisement decision for a Little Ilford premises is 9 Granville Road in June 2014. The tribunal determines the enfranchisement price payable by the applicants for the freehold was £32,548 This case related to 5 flats. The number of years remaining on the existing lease(s) was 73.8 years.