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Top reasons for West Beckton lease extension


Top reasons for lease extension now:

Increase your lease and increase your West Beckton property value

The closer a domestic lease in West Beckton gets to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, beyond 100 years remaining then this decrease may be fractional however there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should consider extending sooner as opposed to later. Most flat owners in West Beckton will qualify for this right; nevertheless a lawyer will 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.

West Beckton property with a lease extension has roughly the same value as a freehold

It is conventional wisdom that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for decades to come.

Lenders may not lend on a short lease

Mortgage Lenders differ in their lending criteria. Some draw the line at 75 years remaining on the lease; others may be prepared to lend with anything in excess 70 years. With less than sixty years, it may be challenging to obtain a mortgage at all.

Lender Requirement
Barclays plc Mortgage term plus 25 years provided that leases of less than 85 years are be referred to us for approval.
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Lloyds TSB Scotland Mortgage term plus 30 years subject to an overall minimum term of 70 years
Nationwide Building Society - Our minimum unexpired lease term is 55 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- 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
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- 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)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

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.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- 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
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to every 5 years
- 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
- Ground Rent is compounded RPI

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- 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
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- 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?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

Get in touch with one of our West Beckton lease extension solicitors or enfranchisement solicitors

Regardless of whether you are a tenant or a freeholder in West Beckton,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with West Beckton valuers.

West Beckton Lease Extension Case Summaries:

Hunter, West Beckton, London,

Hunter was the the leasehold proprietor of a high value flat in West Beckton on the market with a lease of a few days over 72 years unexpired. Hunter informally approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Hunter to exercise his statutory right. Hunter procured expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.

West Beckton case:

Last Spring we were contacted by Mr and Mrs. O Harris , who was assigned a lease of a one bedroom flat in West Beckton in January 2008. The question was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Similar properties in West Beckton with 100 year plus lease were worth £260,200. The mid-range amount of ground rent was £65 invoiced monthly. The lease lapsed on 8 July 2086. Taking into account 66 years outstanding we approximated the compensation to the landlord to extend the lease to be between £16,200 and £18,600 not including fees.

Decision in Newham

An example of a Lease Extension case for a West Beckton property is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case affected 1 flat. The unexpired lease term was 69.77 years.