Leytonstone leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Leytonstone tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Leytonstone you must check if your lease has between 70 and 90 years remaining. There are good reasons why a Leytonstone leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is put in place without delay
Leasehold premises in Leytonstone with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Yorkshire Building Society | 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. |
Retaining our service gives you enhanced control over the value of your Leytonstone leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jonathan owned a 2 bedroom flat in Leytonstone being marketed with a lease of a little over 72 years outstanding. Jonathan informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jonathan to exercise his statutory right. Jonathan obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Dr D López acquired a purpose-built apartment in Leytonstone in April 2007. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Identical properties in Leytonstone with an extended lease were valued about £208,600. The average amount of ground rent was £60 collected annually. The lease ended in 2081. Considering the 57 years unexpired we estimated the premium to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Leytonstone property is 36 New Wanstead in August 2010. The Tribunal arrived at a valuation of the premium for the freehold of £22,359. This case was in relation to 2 flats. The number of years remaining on the existing lease(s) was 73.92 years.