The market value of Walthamstow leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate significantly once the remaining term is less than eighty years
Leasehold premises in Walthamstow with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Walthamstow lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Last year Stanley, came dangerously near to the eighty-year threshold with the lease on his basement apartment in Walthamstow. In buying his home two decades ago, the lease term was of no interest. Luckily, it dawned on him that he would imminently be paying way over the odds for a lease extension. Stanley was able to extend his lease just ahead of time in July. Stanley and the freeholder eventually settled on sum of £5,000 . If the lease had descended below eighty years, the sum would have increased by at least £975.
Last month we were contacted by Dr Rachel Simon , who owned a first floor flat in Walthamstow in May 2006. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Similar homes in Walthamstow with an extended lease were in the region of £249,200. The average ground rent payable was £60 billed annually. The lease terminated in 2077. Taking into account 51 years remaining we calculated the compensation to the freeholder for the lease extension to be between £42,800 and £49,400 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Walthamstow premises is 12 Nutfield Road in July 2014. the Tribunal judged that the price to be paid by the applicants for the freehold interest should be £19,572 This case was in relation to 2 flats. The unexpired term was 72.02 years.