The value of Newham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the unexpired lease term is less than eighty years
It is generally accepted that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Newham lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Kyle owned a studio apartment in Newham being sold with a lease of a few days over sixty years outstanding. Kyle informally spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Kyle to invoke his statutory right. Kyle procured expert advice and secured satisfactory resolution without resorting to tribunal and sell the flat.
Last Winter we were called by Dr U Harris , who was assigned a lease of a newly refurbished apartment in Newham in July 2001. We are asked if we could estimate the price could be for a ninety year lease extension. Similar homes in Newham with 100 year plus lease were in the region of £260,200. The average amount of ground rent was £65 billed quarterly. The lease ended in 2092. Considering the 66 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £14,300 and £16,400 exclusive of fees.
An example of a Lease Extension case for a Newham premises is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The unexpired term was 69.77 years.