The re-sale value of a leasehold property in New Cross depends on how many years the lease has remaining. If it is close to or less than eighty years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be addressed well before the 80 year threshold. Leasehold Reform legislation entitles New Cross qualifying lessees to acquire a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in New Cross with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in New Cross,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with New Cross valuers.
In 2014 Callum, came dangerously close to the 80-year mark with the lease on his ground floor flat in New Cross. In buying his property 19 years ago, the unexpired term was of no interest. Fortunately, he became aware that he would soon be paying way over the odds for a lease extension. Callum arranged for a lease extension just in the nick of time last June. Callum and the landlord subsequently settled on an amount of £5,500 . If the lease had dropped to less than eighty years, the sum would have escalated by a minimum £1,125.
In 2012 we were approached by Mr Jasper Hernández who, having was assigned a lease of a ground floor flat in New Cross in July 2003. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative residencies in New Cross with an extended lease were in the region of £275,000. The average amount of ground rent was £65 billed per annum. The lease terminated on 6 September 2092. Taking into account 68 years left we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including legals.
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 related to 3 flats. The number of years remaining on the existing lease(s) was 80.01 years.