There is no doubt about it a leasehold flat or house in Blackheath is a wasting asset as a result of the diminishing lease term. Where the lease has, over 125 years remaining then this decrease may be negligible nevertheless there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary reason why you should extend the lease without delay. The majority of flat owners in Blackheath will meet the qualifying criteria; that being said a lawyer will be able to confirm whether you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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: • 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 • The value of the property subject to the short remaining term is £500,000 or more AND • 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Blackheath,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Blackheath valuers.
During the course of the last few months Charlie, started to get near to the 80-year threshold with the lease on his first floor apartment in Blackheath. Having bought his home two decades ago, the unexpired term was of no significance. As luck would have it, he realised he needed to take steps soon on a lease extension. Charlie was able to extend his lease just in the nick of time in September. Charlie and the landlord who owned the flat above ultimately agreed on an amount of £5,000 . If he failed to meet the deadline, the price would have escalated by at least £1,025.
Last year we were e-mailed by Dr S Howard , who took over the lease of a one bedroom apartment in Blackheath in June 2004. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Similar premises in Blackheath with an extended lease were worth £168,800. The average ground rent payable was £60 invoiced annually. The lease ran out in 2080. Given that there were 55 years unexpired we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of expenses.
An example of a Lease Extension case for a Blackheath residence is 73 Walerand Road in August 2012. the result of the findings of the Tribunal led to a premium to be paid for the extended lease in respect of Flat 73 in the sum of £10,040. The premium applicable in respect of Flat 85 was £5,710. This case related to 2 flats. The remaining number of years on the lease was 72 years.