Old Ford leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Old Ford residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Old Ford you must check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Old Ford,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Old Ford valuers.
In 2014 Hunter, started to get near to the 80-year mark with the lease on his garden apartment in Old Ford. In buying his flat two decades ago, the lease term was of no concern. As luck would have it, he realised he needed to take steps soon on Extending the lease. Hunter arranged for a lease extension at the eleventh hour in March. Hunter and the freeholder eventually agreed on the final figure of £5,500 . If he not met the deadline, the premium would have escalated by at least £875.
Mr W Young moved into a first floor apartment in Old Ford in September 2004. We are asked if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical homes in Old Ford with 100 year plus lease were in the region of £265,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease lapsed in 2099. Taking into account 73 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.
An example of a Freehold Enfranchisement decision 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.