North Ockendon residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Chelsea 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. |
| Halifax | 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 |
The conveyancers that we work with procure North Ockendon 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 conveyancer we work with provide it.
Teddy was the the leasehold proprietor of a high value apartment in North Ockendon being sold with a lease of just over 61 years remaining. Teddy informally approached his freeholder being a well known local-based freehold company for a lease extension. 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 to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Teddy to exercise his statutory right. Teddy obtained expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
In 2012 we were approached by Ms Nicole Reed who, having acquired a first floor apartment in North Ockendon in January 2010. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical residencies in North Ockendon with an extended lease were in the region of £295,000. The average amount of ground rent was £45 collected annually. The lease lapsed in 2100. Having 74 years left we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of legals.
An example of a Lease Extension decision for a North Ockendon property is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case related to 1 flat. The unexpired residue of the current lease was 57.5 years.