The basic rule is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in New Cross can extend the lease for a further ninety years under statute. Do think carefully before delaying your New Cross lease extension. Shelving the costs now simply increases the premium you will eventually be required to pay for a lease extension.
Leasehold residencies in New Cross with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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 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; |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in New Cross,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Cross valuers.
Last Autumn Seth, started to get close to the 80-year mark with the lease on his basement flat in New Cross. In buying his home 18 years ago, the length of the lease was of little concern. by good luck, he recognised he needed to take steps soon on a lease extension. Seth extended the lease just in the nick of time in January. Seth and the landlord in the end agreed on an amount of £6,000 . If the lease had fallen to less than eighty years, the figure would have gone up by at least £1,125.
Mr and Mrs. S Michel completed a garden apartment in New Cross in June 2007. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparable properties in New Cross with a long lease were worth £295,000. The average ground rent payable was £45 billed annually. The lease expired on 20 January 2100. Considering the 74 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
An example of a Freehold Enfranchisement case for a New Cross flat 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 related to 3 flats. The unexpired lease term was 80.01 years.