The market value of a leasehold property in North East London depends on how long the lease has remaining. If it is close to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years unexpired so that all matters can be addressed ahead of the 80 year cut off point. Leasehold Reform legislation entitles North East London qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of 90 years. The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
Regardless of whether you are a tenant or a freeholder in North East London,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with North East London valuers.
Trailing protracted discussions with the landlord of her ground floor flat in North East London, Jodie commenced the lease extension process just as the lease was nearing the critical 80-year mark. The legal work was concluded in September 2005. The landlord’s costs were kept to an absolute minimum.
Mr Seth James moved into a purpose-built apartment in North East London in August 1999. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparable premises in North East London with 100 year plus lease were valued around £255,000. The mid-range ground rent payable was £50 invoiced yearly. The lease ended on 17 January 2097. Taking into account 71 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.
Mr Milo Anderson bought a newly refurbished flat in North East London in November 2009. We are asked if we could estimate the price would likely be for a 90 year lease extension. Comparative premises in North East London with a long lease were worth £254,200. The mid-range ground rent payable was £60 billed yearly. The lease elapsed on 23 September 2077. Having 51 years remaining we approximated the premium to the landlord to extend the lease to be between £43,700 and £50,600 plus fees.