The re-sale value of a leasehold property in Newham is impacted by how long the lease has left to run. If it is near to or fewer than eighty years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that formalities can be addressed prior to the 80 year cut off point. Leasehold Reform legislation entitles Newham qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Newham 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 home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Yorkshire 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. |
Retaining our service will provide you better control over the value of your Newham leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy correspondence with the freeholder of her two bedroom apartment in Newham, Natalie initiated the lease extension process as the 80 year deadline was fast advancing. The lease extension was concluded in August 2010. The landlord’s fees were kept to an absolute minimum.
Dr Kai Jackson bought a one bedroom apartment in Newham in July 1995. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Similar residencies in Newham with 100 year plus lease were in the region of £181,600. The mid-range ground rent payable was £55 invoiced monthly. The lease concluded in 2078. Considering the 52 years left we calculated the premium to the landlord to extend the lease to be within £30,400 and £35,200 not including legals.
An example of a Lease Extension decision 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 was in relation to 1 flat. The unexpired term was 69.77 years.