West Ham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most West Ham tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in West Ham you would be well advised to investigate if your lease has between 70 and ninety years remaining. There are good reasons why a West Ham leaseholder with a lease having around eighty years unexpired should take steps to make sure that a lease extension is actioned without delay
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 lawyers that we work with handle West Ham 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.
Edward was the the leasehold owner of a high value apartment in West Ham on the market with a lease of just over 72 years outstanding. Edward on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Edward to exercise his statutory right. Edward obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Dr Harrison Davies completed a purpose-built apartment in West Ham in November 2011. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar premises in West Ham with a long lease were valued about £183,600. The average ground rent payable was £65 invoiced monthly. The lease ended in 2083. Having 57 years outstanding we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of legals.
An example of a Lease Extension matter before the tribunal for a West Ham residence 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 remaining number of years on the lease was 69.77 years.