Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Old Ford. Clearly, the period of lease left reduces over time. This is often overlooked and only raises itself as an issue when the property needs to be sold or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in Old Ford have the right to extend the lease for an additional ninety years under legislation. You should give due consideration before putting off your Old Ford lease extension. Holding off that expense now simply increases the price you will ultimately incur to extend your lease
Leasehold properties in Old Ford with in excess of 100 years left on the lease are sometimes referred to as ‘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 freehold 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
The conveyancing solicitors that we work with handle Old Ford 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 lawyer we work with provide it.
Elijah was the the leasehold owner of a studio apartment in Old Ford being sold with a lease of fraction over 59 years outstanding. Elijah informally spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Elijah to exercise his statutory right. Elijah procured expert legal guidance and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
Mr J Gómez was assigned a lease of a purpose-built apartment in Old Ford in September 2010. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Similar residencies in Old Ford with 100 year plus lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced monthly. The lease expiry date was on 13 May 2101. Taking into account 75 years remaining we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.
An example of a Freehold Enfranchisement case 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.