With a domestic leasehold property in Limehouse, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater notably when there are less than 80 years remaining. Leasehold owners in Limehouse with a lease approaching 81 years left should seriously think of extending it sooner than later. When the lease term has under 80 years left, under the current statute the freeholder can calculate and charge a larger amount, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Limehouse lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Kian was the the leasehold proprietor of a 2 bedroom apartment in Limehouse being marketed with a lease of just over sixty years remaining. Kian on an informal basis contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be due on a lease extension were Kian to exercise his statutory right. Kian procured expert legal guidance and secured an acceptable resolution informally and sell the flat.
In 2010 we were contacted by Ms D Parker who, having purchased a studio flat in Limehouse in September 2010. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Identical flats in Limehouse with 100 year plus lease were in the region of £201,200. The mid-range amount of ground rent was £55 collected monthly. The lease expired in 2080. Given that there were 56 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Limehouse flat is 26 Rhondda Grove in June 2009. The net price payable by the leaseholders as determined by the Tribunal was £3,015.13. This comprised £11,300 premium for the reversion less £8,284.87 costs as ordered by the County Court.