With a domestic leasehold property in Newham, you are actually purchasing a right to reside in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are fewer than 80 years remaining. Residents in Newham with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. When the lease term has fewer than eighty years left, under the current statute the freeholder can calculate and demand a larger amount, based on a technical calculation, known as “marriage value” which is payable.
Leasehold premises in Newham with more than 100 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 freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Newham,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Newham valuers.
Off the back of protracted negotiations with the landlord of her studio apartment in Newham, Jasmine initiated the lease extension process as the eighty year mark was fast nearing. The legal work completed in July 2012. The freeholder’s costs were negotiated to slightly above 550 pounds.
In 2010 we were called by Mr D Watson who, having moved into a studio flat in Newham in August 2010. We are asked if we could approximate the premium could be to extend the lease by 90 years. Similar residencies in Newham with a long lease were valued around £210,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease finished on 23 July 2105. Taking into account 80 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.
An example of a Lease Extension matter before the tribunal for a Newham residence 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 related to 1 flat. The number of years remaining on the existing lease(s) was 69.77 years.