New Cross leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most New Cross tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in New Cross you really ought to check if your lease has between seventy and ninety years left. There are good reasons why a New Cross flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is effected without delay
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
The lawyers that we work with procure New Cross 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 conveyancer we work with provide it.
During the course of the last few months Jasper, came seriously near to the eighty-year mark with the lease on his ground floor apartment in New Cross. In buying his property twenty years ago, the length of the lease was of no interest. by good luck, it dawned on him that he needed to take action soon on a lease extension. Jasper arranged for a lease extension just in the nick of time last May. Jasper and the freeholder eventually agreed on the final figure of £5,500 . If the lease had slid lower than 80 years, the figure would have increased by at least £850.
In 2014 we were approached by Dr R Bonnet who, having acquired a garden apartment in New Cross in September 2012. We are asked if we could approximate the price could be for a ninety year lease extension. Comparable properties in New Cross with 100 year plus lease were worth £200,000. The average ground rent payable was £50 billed quarterly. The lease came to a finish on 22 January 2102. Having 77 years outstanding we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus expenses.
An example of a Freehold Enfranchisement case for a New Cross property 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 residue of the current lease was 80.01 years.