Leytonstone leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Leytonstone tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Leytonstone you should see if your lease has between seventy and ninety years left. There are good reasons why a Leytonstone leaseholder with a lease having around 80 years left should take action to make sure that a lease extension is actioned without delay
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
Retaining our service will provide you increased control over the value of your Leytonstone 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.
Eliot was the the leasehold owner of a conversion flat in Leytonstone being marketed with a lease of fraction over 59 years unexpired. Eliot on an informal basis approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot procured expert advice and secured satisfactory resolution without resorting to tribunal and sell the flat.
Last Autumn we were contacted by Dr I Dupont , who moved into a first floor apartment in Leytonstone in October 2005. The question was if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Identical flats in Leytonstone with a long lease were worth £257,800. The mid-range ground rent payable was £65 collected monthly. The lease lapsed in 2091. Having 65 years left we calculated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including legals.
An example of a Freehold Enfranchisement case for a Leytonstone flat is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case affected 2 flats. The unexpired term was 73.92 years.