Why you should start your Anerley lease extension
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Main reasons to commence your Anerley lease extension today:
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Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/anerley">Anerley</a> property value </h4>
<p> The market value of a leasehold property in Anerley depends on how many years the lease has left to run. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension before purchasing. Ideally one should start the lease extension process when a lease still has 82 years to run so that a lease extension can be finalised ahead of the 80 year cut off point. Statute enables Anerley qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension. <h4>Anerley property with a lease extension is almost the same value as a freehold</h4>
<p> It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
<h4>Lenders may decide not to finance a property with a short lease</h4> Mortgage companies are making their criteria more stringent and many now expect flats to have at least sixty if not seventy years remaining once the mortgage has expired. Given that many flats in Anerley were created in the fifties, sixties and seventies this means many now require lease extensions if they if they are to be mortgageable.
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<th> Requirement
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<td>Barclays plc</td>
<td> Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).<br /><br />Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.<br /><br />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:<br /><br />• 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<br />• The value of the property subject to the short remaining term is £500,000 or more AND<br />• 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;
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<td>Birmingham Midshires</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Chelsea Building Society</td>
<td> 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.
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<td>Santander</td>
<td> You must report the unexpired lease term to us and await our instructions if: <br />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<br />2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or<br />3. no valuation report is provided<br />However, we will not accept a lease where on expiry of the mortgage:<br />(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or<br />(ii) less than 30 years remain and the loan is repaid on a capital and interest basis<br /><br />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.
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- 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 <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- 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)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />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.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- 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<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- 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 <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- 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? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Why use us for your lease extension in Anerley? </h4>
<p> Irrespective of whether you are a tenant or a freeholder in Anerley,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Anerley valuers.
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Anerley Lease Extension Case Summaries:
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<h5> Ryan, Anerley, South East London</h5>
<p> Two years ago Ryan, started to get close to the eighty-year threshold with the lease on his studio flat in Anerley. Having purchased his flat 19 years ago, the lease term was of little bearing. Thankfully, he realised he needed to take steps soon on Extending the lease. Ryan extended the lease just ahead of time last March. Ryan and the freeholder via the managing agents ultimately agreed on the final figure of £6,000 . If the lease had slid lower than 80 years, the premium would have increased by at least £950.
<h5>Anerley case:</h5>
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In 2014 we were approached by Mr and Mrs. G Davis who, having completed a basement flat in Anerley in October 2011. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Identical residencies in Anerley with an extended lease were worth £200,000. The average amount of ground rent was £50 invoiced annually. The lease end date was in 2104. Given that there were 78 years left we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.
<div> <h5>Decision in Bromley</h5>
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An example of a Lease Extension decision for a Anerley property is
Flats 55, 67 & 70 Melbourne Court Anerley Road in July 2013. The tribunal calculated that the premium for the extended lease at
£48,366.00 for at 55, and £88,329.00 for ats 67 and 70 combined.
This case related to 1 flat. The number of years remaining on the existing lease(s) was 26.38 years.
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