Why you should commence your Snaresbrook lease extension
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<h3> Top reasons for lease extension now:
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<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/snaresbrook">Snaresbrook</a> leasehold property depreciates with the years remaining on the lease.
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<p> As the length of the unexpired term of a Snaresbrook residential lease decreases so does its value and therefore the value of your property. If the residual term has, in excess of 100 years to run then this decrease may be negligible that being said there will become a point in time 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 be significant. It is the primary logic behind why you should consider extending without delay. The majority of flat owners in Snaresbrook will meet the qualifying criteria; however a lawyer should be able to advise if you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
<h4>Snaresbrook property with a lease extension is almost the same value as a freehold</h4>
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Leasehold premises in Snaresbrook with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it. <h4>Lending institutions will not lend on a short lease</h4> Mortgage companies are making their criteria more stringent and many now require flats to have at least sixty if not seventy years remaining at the expiry of the mortgage. Considering a number of flats in Snaresbrook were created in the 1950s, 1960s and 1970s as a result many now need to be extended if they wish to get a mortgage.
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<td>Chelsea Building Society</td>
<td> 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.
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<td>Coventry Building Society</td>
<td> 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.
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<td>Santander</td>
<td> You must report the unexpired lease term to us and await our instructions if: <br />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<br />2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or<br />3. no valuation report is provided<br />However, we will not accept a lease where on expiry of the mortgage:<br />(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or<br />(ii) less than 30 years remain and the loan is repaid on a capital and interest basis<br /><br />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.
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<td>Skipton Building Society</td>
<td> 85 years from the date of completion of the mortgage<br /><br />For Buy to Let cases:<br />- lettings must not breach any of the lessee’s covenants; and<br />- consent of the lessor to lettings must be obtained if necessary
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<h4>
Why use us for your lease extension in Snaresbrook? </h4>
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Lease extensions in Snaresbrook can be a difficult process. We recommend you secure professional help from a lawyer and valuer with experience in lease extensions.
<p>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 Snaresbrook lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
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Snaresbrook Lease Extension Case Studies:
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<h5> Rory, Snaresbrook, North East London,</h5>
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Rory was the the leasehold owner of a conversion apartment in Snaresbrook on the market with a lease of fraction over 61 years unexpired. Rory on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared 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 £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Rory to invoke his statutory right. Rory procured expert legal guidance and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
<h5>Snaresbrook case:</h5>
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Last Summer we were phoned by Mr and Mrs. D Turner , who
bought a studio flat in Snaresbrook in January 2001. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative flats in Snaresbrook with a long lease were valued around £257,800. The mid-range amount of ground rent was £65 invoiced yearly. The lease terminated on 21 April 2091. Taking into account 65 years unexpired we estimated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 not including costs.
<div> <h5>Decision in Redbridge</h5>
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An example of a Freehold Enfranchisement decision for a Snaresbrook premises is
36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359.
This case affected 2 flats. The unexpired lease term was 73.92 years.
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