Unfortunately that a Old Ford residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Old Ford property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining falls below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Old Ford will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Old Ford,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Old Ford valuers.
After unsuccessful negotiations with the freeholder of her ground floor flat in Old Ford, Jessica initiated the lease extension process just as the lease was approaching the crucial 80-year threshold. The transaction was concluded in June 2005. The freeholder’s charges were kept to an absolute minimum.
In 2014 we were contacted by Mr and Mrs. F Hill who, having acquired a purpose-built apartment in Old Ford in June 1998. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Comparable homes in Old Ford with 100 year plus lease were valued about £264,000. The average amount of ground rent was £60 collected quarterly. The lease elapsed on 23 January 2078. Having 53 years remaining we approximated the compensation to the freeholder to extend the lease to be within £37,100 and £42,800 exclusive of fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Old Ford premises 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.