As the the remaining lease term of a North East London domestic lease diminished so does its value and therefore the value of your property. Where the residual term has, in excess of 125 years to run then this decrease may be of little impact that being said there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary rational as to why you should consider extending sooner rather than later. The majority of flat owners in North East London will meet the qualifying criteria; however a conveyancing solicitor will be able to advise if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the premises 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Using our service gives you enhanced control over the value of your North East London leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Aarav was the the leasehold proprietor of a high value flat in North East London being sold with a lease of a few days over 59 years unexpired. Aarav informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Aarav to invoke his statutory right. Aarav obtained expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Last Autumn we were approach by Dr T Morel , who took over the lease of a basement flat in North East London in June 2000. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Comparable premises in North East London with 100 year plus lease were worth £246,800. The average ground rent payable was £60 billed annually. The lease expired on 13 May 2076. Taking into account 50 years remaining we calculated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 plus fees.
Mr M Nelson acquired a purpose-built flat in North East London in October 1997. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparative residencies in North East London with an extended lease were valued about £208,200. The mid-range ground rent payable was £65 billed yearly. The lease came to a finish in 2087. Given that there were 61 years remaining we approximated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 not including fees.