When it comes to domestic leasehold property in West Ham, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than 80 years left. Leasehold owners in West Ham with a lease approaching 81 years remaining should seriously consider extending it sooner than later. When a lease has under 80 years outstanding, under the current Act the landlord is entitled to calculate and charge a larger premium, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold residencies in West Ham with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| 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 |
The conveyancing solicitors that we work with undertake 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 conveyancer we work with provide it.
In recent months Eli, started to get near to the eighty-year threshold with the lease on his one bedroom flat in West Ham. In buying his property two decades ago, the length of the lease was of no concern. Fortunately, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Eli extended the lease just under the wire last May. Eli and the landlord who owned the flat above subsequently agreed on a premium of £5,500 . If the lease had gone lower than 80 years, the sum would have gone up by at least £1,025.
In 2013 we were approached by Mr T Miller who, having was assigned a lease of a studio flat in West Ham in September 1995. The question was if we could estimate the premium would be to prolong the lease by 90 years. Identical residencies in West Ham with a long lease were worth £215,600. The average ground rent payable was £45 collected monthly. The lease lapsed on 16 November 2087. Taking into account 62 years left we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 not including legals.
An example of a Lease Extension decision for a West Ham premises 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 residue of the current lease was 69.77 years.