The market value of New Cross leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the remaining term is less than eighty years
Leasehold premises in New Cross with more than 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
|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.|
|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;
|Halifax||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.
Lease extensions in New Cross can be a difficult process. We recommend you secure guidance from a conveyancer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring New Cross lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Dylan owned a high value apartment in New Cross on the market with a lease of a few days over 72 years left. Dylan informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Dylan to exercise his statutory right. Dylan procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Last Spring we were called by Mr and Mrs. B Lewis , who was assigned a lease of a one bedroom flat in New Cross in May 1995. We are asked if we could estimate the price would likely be for a ninety year lease extension. Identical properties in New Cross with an extended lease were valued about £208,600. The mid-range amount of ground rent was £60 invoiced quarterly. The lease concluded in 2080. Given that there were 57 years outstanding we estimated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 exclusive of fees.
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 was in relation to 3 flats. The unexpired term was 80.01 years.