The market value of a leasehold property in New Cross is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years unexpired so that all matters can be addressed well before the eighty year threshold. Current legislation enables New Cross qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Luca, came perilously near to the 80-year threshold with the lease on his first floor apartment in New Cross. In buying his flat two decades ago, the lease term was of minimal bearing. Fortunately, he noticed he needed to take steps soon on a lease extension. Luca arranged for a lease extension just under the wire last April. Luca and the freeholder ultimately agreed on the final figure of £5,500 . If he failed to meet the deadline, the premium would have escalated by at least £1,000.
Mrs P Vincent acquired a one bedroom flat in New Cross in March 2010. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by 90 years. Identical homes in New Cross with a long lease were valued around £265,200. The average amount of ground rent was £65 invoiced every twelve months. The lease expired on 11 March 2092. Having 66 years remaining we estimated the premium to the landlord to extend the lease to be within £15,200 and £17,600 plus fees.
An example of a Freehold Enfranchisement case for a New Cross residence 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 unexpired residue of the current lease was 80.01 years.