New Cross leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most New Cross tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in New Cross you should check if your lease has between seventy and 90 years remaining. There are good reasons why a New Cross flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is actioned without delay
Leasehold premises in New Cross with over one hundred years remaining 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 situations there is often little to be gained by buying the reversionary interest 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| 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 will provide you increased control over the value of your New Cross leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Jackson owned a high value flat in New Cross on the market with a lease of fraction over fifty eight years unexpired. Jackson informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Jackson to invoke his statutory right. Jackson procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were approach by Mr and Mrs. M Harris , who bought a ground floor apartment in New Cross in July 2009. The question was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Similar residencies in New Cross with a long lease were in the region of £205,000. The average amount of ground rent was £50 billed per annum. The lease ended on 17 June 2104. Given that there were 78 years left we calculated the premium to the freeholder to extend the lease to be within £7,600 and £8,800 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal 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 was in relation to 3 flats. The unexpired term was 80.01 years.