The re-sale value of a leasehold property in New Beckenham depends on how long the lease has left to run. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be concluded prior to the 80 year mark. Statute enables New Beckenham qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The lawyers that we work with handle New Beckenham 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 conveyancing solicitor we work with provide it.
Trailing protracted negotiations with the landlord of her purpose-built apartment in New Beckenham, Poppy initiated the lease extension process just as the lease was nearing the all-important 80-year threshold. The lease extension completed in November 2010. The landlord’s fees were negotiated to below 450 GBP.
Mr I Wilson bought a basement apartment in New Beckenham in March 2007. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Comparable residencies in New Beckenham with an extended lease were in the region of £280,000. The average amount of ground rent was £45 invoiced every twelve months. The lease terminated in 2096. Taking into account 70 years outstanding we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including expenses.
An example of a Freehold Enfranchisement case for a New Beckenham flat 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 term was 76.75 and 88.83.