It’s a harsh truth that a North Ockendon residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the North Ockendon property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be due. The majority of flat owners in North Ockendon will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold premises in North Ockendon with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Godiva Mortgages | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you enhanced control over the value of your North Ockendon leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Luke was the the leasehold owner of a high value flat in North Ockendon being marketed with a lease of a few days over sixty years left. Luke on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. No ground rent would be payable on a lease extension were Luke to invoke his statutory right. Luke procured expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Ms Kirsty Rogers completed a basement flat in North Ockendon in February 2002. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year extension to my lease. Comparative premises in North Ockendon with an extended lease were in the region of £208,600. The average ground rent payable was £60 invoiced every twelve months. The lease expired in 2083. Given that there were 57 years left we estimated the premium to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of fees.
An example of a Lease Extension case for a North Ockendon residence 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 was in relation to 1 flat. The unexpired term as at the valuation date was 57.5 years.