For anyone whose New Beckenham home is held on a long lease, the message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you better control over the value of your New Beckenham leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After protracted correspondence with the freeholder of her first floor flat in New Beckenham, Shannon started the lease extension process as the 80 year threshold was rapidly coming. The lease extension was finalised in November 2009. The landlord’s fees were negotiated to slightly above 700 GBP.
Last Winter we were contacted by Ms Lily Wilson , who took over the lease of a purpose-built flat in New Beckenham in November 2011. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar premises in New Beckenham with an extended lease were valued around £235,600. The mid-range ground rent payable was £60 collected annually. The lease finished in 2088. Having 62 years remaining we approximated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a New Beckenham residence is 26 Manor Road in July 2010. the Tribunal decided that price to be paid for the freehold was £12,420 This case related to 2 flats. The unexpired lease term was 76.75 and 88.83.