Poplar residential property owned on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
Leasehold properties in Poplar with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Godiva Mortgages | 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Poplar,the lease extension solicitors 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 Poplar valuers.
In recent months Harrison, started to get close to the 80-year threshold with the lease on his purpose- built flat in Poplar. In buying his flat two decades ago, the lease term was of no bearing. Fortunately, he realised he would imminently be paying way over the odds for a lease extension. Harrison was able to extend his lease just under the wire last April. Harrison and the freeholder via the management company ultimately agreed on an amount of £5,500 . If the lease had fallen below eighty years, the sum would have gone up by at least £925.
In 2011 we were contacted by Ms M Bernard who, having moved into a one bedroom apartment in Poplar in April 1997. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Poplar with 100 year plus lease were valued around £242,600. The mid-range amount of ground rent was £45 invoiced yearly. The lease elapsed on 17 September 2093. Having 67 years remaining we estimated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 not including professional charges.
An example of a Freehold Enfranchisement case for a Poplar flat is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case affected 3 flats. The unexpired lease term was 101.61 years.