New Cross leases on domestic deteriorating in value. if your lease has about ninety years unexpired, you should start thinking about a lease extension. If lease term is less than 80 years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in New Cross will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated so it’s wise to be guided by a conveyancing solicitor during the process.
It is generally considered that a residential leasehold with in excess of one hundred 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 premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your New Cross leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
John owned a high value flat in New Cross on the market with a lease of just over sixty years outstanding. John informally spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be payable on a lease extension were John to invoke his statutory right. John obtained expert advice and secured satisfactory resolution informally and sell the flat.
Mr and Mrs. E Lewis acquired a first floor apartment in New Cross in June 2009. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Identical homes in New Cross with a long lease were in the region of £257,800. The mid-range amount of ground rent was £65 invoiced annually. The lease came to a finish on 13 June 2090. Given that there were 65 years left we calculated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of expenses.
An example of a Freehold Enfranchisement decision for a New Cross premises is 41 Endwell Road in March 2013. this matter relateed to the acquisition of the freehold of a mid- terraced Victorian house converted into three separate self-contained dwellings. By an order dated 28/11/2012, Deputy District Judge Cole in the Bromley County Court held that the leaseholders were entitled to acquire the freehold and directed that the premium payable be determined by this Tribunal. The Tribunal assessed the premium to be £14,753 This case affected 3 flats. The unexpired lease term was 80.01 years.