Unfortunately that a West Ham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the West Ham property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining falls below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in West Ham will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you enhanced control over the value of your West Ham leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Matthew, started to get close to the 80-year mark with the lease on his first floor flat in West Ham. Having purchased his home twenty years ago, the length of the lease was of no significance. As luck would have it, he recognised he would imminently be paying way over the odds for a lease extension. Matthew was able to extend his lease just ahead of time last April. Matthew and the freeholder in the end agreed on a premium of £5,500 . If he had missed the deadline, the figure would have become more costly by at least £1,050.
In 2011 we were phoned by Ms C Phillips who, having purchased a one bedroom flat in West Ham in July 1997. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Comparative properties in West Ham with 100 year plus lease were in the region of £264,000. The average amount of ground rent was £60 invoiced yearly. The lease terminated on 25 October 2078. Given that there were 53 years unexpired we estimated the premium to the landlord for the lease extension to be between £37,100 and £42,800 plus expenses.
An example of a Lease Extension case for a West Ham flat 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 number of years remaining on the existing lease(s) was 69.77 years.