Newham 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 the lease becomes more expensive. The majority of owners of residential leasehold property in Newham enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Newham you must investigate if your lease has between 70 and ninety years remaining. There are good reasons why a Newham leaseholder with a lease having around eighty years remaining should take steps to make sure that a lease extension is actioned without delay
It is generally considered that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Newham,the lease extension experts 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 Newham valuers.
Subsequent to unsuccessful negotiations with the freeholder of her studio apartment in Newham, Harriet commenced the lease extension process as the eighty year deadline was fast coming. The transaction completed in October 2011. The freeholder’s fees were kept to an absolute minimum.
Last Summer we were called by Dr Harriet Stewart , who purchased a studio flat in Newham in August 2012. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Similar premises in Newham with 100 year plus lease were in the region of £260,200. The mid-range amount of ground rent was £65 collected annually. The lease lapsed in 2091. Taking into account 66 years left we calculated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 plus fees.
An example of a Lease Extension matter before the tribunal for a Newham premises is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The unexpired residue of the current lease was 69.77 years.