North East London leases on domestic deteriorating in value. Where your lease has about 90 years left, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease drops below this level then you begin paying an additional element called marriage value. Leasehold owners in North East London will usually qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check your eligibility. In certain cases you may not qualify. There are prescribed deadlines and procedures to follow once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold properties in North East London with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in 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. |
| 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. |
| 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in North East London can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring North East London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Connor owned a studio apartment in North East London on the market with a lease of a little over 72 years outstanding. Connor informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Connor to exercise his statutory right. Connor obtained expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
In 2011 we were called by Mr and Mrs. W Thomas who, having purchased a purpose-built apartment in North East London in February 1995. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar homes in North East London with a long lease were valued about £265,000. The average amount of ground rent was £50 collected yearly. The lease ran out on 19 October 2099. Taking into account 73 years unexpired we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
Last Summer we were phoned by Mr and Mrs. I Reed , who acquired a one bedroom flat in North East London in October 2004. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by a further 90 years. Comparative homes in North East London with a long lease were worth £264,000. The average amount of ground rent was £60 billed annually. The lease elapsed in 2079. Considering the 53 years left we estimated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 plus costs.