Silvertown leases on residential properties are gradually losing value. Where your lease has about 90 years remaining, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for a lease extension to take place before the term of the current lease falls lower than eighty years - otherwise a higher amount will be due. Flat owners in Silvertown will usually qualify for a lease extension; however a solicitor will confirm your eligibility. In certain circumstances you may not be entitled. There are also strict timetables and formalities to follow once the process has commenced so it’s sensible to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
The conveyancing solicitors that we work with undertake Silvertown 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 conveyancing solicitor we work with provide it.
Last year Ibrahim, started to get near to the eighty-year threshold with the lease on his purpose- built flat in Silvertown. Having purchased his property twenty years ago, the unexpired term was of minimal relevance. Luckily, it dawned on him that he needed to take steps soon on a lease extension. Ibrahim arranged for a lease extension just in the nick of time in September. Ibrahim and the freeholder via the managing agents eventually settled on an amount of £6,000 . If he failed to meet the deadline, the figure would have escalated by a minimum £1,125.
Last year we were approach by Mr and Mrs. J Girard , who completed a one bedroom flat in Silvertown in November 2011. The dilemma was if we could approximate the price would likely be to prolong the lease by ninety years. Identical homes in Silvertown with a long lease were worth £242,600. The mid-range amount of ground rent was £45 invoiced annually. The lease terminated on 20 July 2093. Given that there were 67 years unexpired we estimated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 plus costs.
An example of a Lease Extension matter before the tribunal for a Silvertown property 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 affected 1 flat. The number of years remaining on the existing lease(s) was 69.77 years.