The market value of a leasehold property in Newham depends on how long the lease has remaining. If it is near to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that formalities can be addressed in advance of the 80 year cut off point. Current legislation enables Newham qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Newham with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Newham,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Newham valuers.
Michael was the the leasehold owner of a high value apartment in Newham on the market with a lease of just over 72 years outstanding. Michael informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Michael to exercise his statutory right. Michael obtained expert advice and was able to make an informed decision and handle with the matter and sell the property.
Last Summer we were called by Ms R Bernard , who moved into a purpose-built apartment in Newham in February 1997. The question was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Newham with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 collected yearly. The lease came to a finish in 2084. Having 58 years left we calculated the premium to the landlord for the lease extension to be within £28,500 and £33,000 plus costs.
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 affected 1 flat. The unexpired term as at the valuation date was 69.77 years.