It’s an underpublicised truth that a Anerley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Anerley property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher amount will be payable. The majority of flat owners in Anerley will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
It is generally considered that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
Using our service will provide you enhanced control over the value of your Anerley leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kai owned a 2 bedroom apartment in Anerley being sold with a lease of a few days over 72 years unexpired. Kai on an informal basis contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 yearly. No ground rent would be payable on a lease extension were Kai to exercise his statutory right. Kai procured expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
Last Summer we were phoned by Mr G Martínez , who owned a one bedroom flat in Anerley in May 2004. We are asked if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Similar flats in Anerley with 100 year plus lease were valued about £295,000. The average amount of ground rent was £50 billed quarterly. The lease ended in 2101. Considering the 75 years as a residual term we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus expenses.
An example of a Lease Extension decision for a Anerley premises 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 residue of the current lease was 26.38 years.