There is no doubt about it a leasehold property in New Cross is a wasting asset as a result of the diminishing lease term. If the residual term has, over 125 years to run then this decrease may be of little impact however there will become a point in time when a lease has less than 80 years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main reason why you should consider extending without delay. Most flat owners in New Cross will meet the qualifying criteria; that being said a conveyancer can advise whether you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
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 is worth the same as a freehold interest in your premises. 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 |
|---|---|
| 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; |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in New Cross,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Cross valuers.
Two years ago Isaac, came dangerously close to the 80-year threshold with the lease on his ground floor flat in New Cross. In buying his property two decades ago, the unexpired term was of no significance. Luckily, he noticed he would soon be paying way over the odds for a lease extension. Isaac extended the lease at the eleventh hour in January. Isaac and the freeholder ultimately settled on a premium of £6,000 . If he not met the deadline, the price would have increased by a minimum £1,075.
In 2011 we were e-mailed by Dr W Gómez who, having moved into a one bedroom apartment in New Cross in September 1996. The question was if we could approximate the price would likely be to prolong the lease by an additional years. Comparative flats in New Cross with a long lease were in the region of £189,000. The mid-range ground rent payable was £55 invoiced annually. The lease elapsed in 2078. Having 53 years outstanding we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal 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 term as at the valuation date was 80.01 years.