For anyone whose Silvertown property is held on a long lease, our message is clear – if you do nothing, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you enhanced control over the value of your Silvertown leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Dylan, started to get close to the eighty-year threshold with the lease on his ground floor apartment in Silvertown. In buying his flat 18 years ago, the length of the lease was of little bearing. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Dylan arranged for a lease extension just under the wire last July. Dylan and the landlord ultimately agreed on the final figure of £5,500 . If the lease had dropped lower than eighty years, the amount would have escalated by a minimum £875.
Last Winter we were contacted by Mr and Mrs. L Peterson , who owned a studio apartment in Silvertown in October 1995. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by 90 years. Identical homes in Silvertown with a long lease were in the region of £260,000. The average amount of ground rent was £50 billed annually. The lease expired in 2097. Taking into account 72 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.
An example of a Lease Extension case for a Silvertown residence is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case related to 1 flat. The remaining number of years on the lease was 69.77 years.