If you are facing a significant premium because your lease in Anerley has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Anerley leasehold property depreciates with the years remaining on the lease.
The market value of Anerley leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate substantially once the remaining term is below than eighty years
Anerley property with a lease extension has roughly the same value as a freehold
Leasehold premises in Anerley with more than one hundred years left 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 property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
Lenders will not lend on a short lease
Nearly all mortgage companies require a lengthy amount of time left on any leasehold residence before they will contemplate lending on it. Even if you don't need a mortgage, you should keep in mind that it is probable that someone wishing to buy your property in the future might well do, so if they can't secure a mortgage, then the market price of your property could suffer. Since 2008 most banks and building societies have increased the required minimum lease length that they are prepared to lend on
| Lender |
Requirement
|
|---|
| Leeds Building Society |
85 years remaining from the start 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
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
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 70 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 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 70 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 1.0% 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
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- 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 1.0% 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
- A lease subject to a peppercorn ground rent (annual rent) charges
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
* 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
Lease Extensions 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 a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
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.
|
| Royal Bank of Scotland |
Mortgage term plus 30 years.
|
| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
|
Get in touch with one of our Anerley lease extension solicitors or enfranchisement solicitors
Regardless of whether you are a tenant or a landlord in Anerley,the lease extension experts 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.
Anerley Lease Extension Case Studies:
Harry, Anerley, South East London
In 2014 Harry, started to get near to the eighty-year threshold with the lease on his leasehold flat in Anerley. In buying his property two decades ago, the length of the lease was of minimal significance. Fortunately, he noticed he needed to take action soon on a lease extension. Harry extended the lease at the eleventh hour last September. Harry and the freeholder via the managing agents eventually agreed on sum of £5,500 . If the lease had descended below 80 years, the premium would have become more costly by a minimum £1,150.
Anerley case:
In 2014 we were contacted by Dr N Thomas who, having was assigned a lease of a purpose-built apartment in Anerley in May 1998. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Comparable residencies in Anerley with 100 year plus lease were valued about £257,800. The mid-range ground rent payable was £65 invoiced annually. The lease finished on 12 March 2091. Taking into account 65 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 exclusive of professional charges.
Decision in Bromley
An example of a Lease Extension case for a Anerley flat 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 unexpired lease term was 26.38 years.