If you are facing a significant premium because your lease in Battlesbridge has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
Increase your lease and increase your Battlesbridge property value
Battlesbridge leases on domestic deteriorating in value. if your lease has in the region of ninety years remaining, you should start thinking about a lease extension. An important point to note is that it is desirable for the lease extension to take place before the term of the current lease dips under eighty years - otherwise a higher premium will be payable. Flat owners in Battlesbridge will mostly qualify for a lease extension; however a solicitor will check if you qualify. In certain situations you may not qualify. There are prescribed deadlines and steps to comply with once the process is triggered so it’s best to be guided by a conveyancer during the process.
An extended lease is almost the same value as a freehold
Leasehold properties in Battlesbridge with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
Banks and Building Societies will not finance a property on a short lease
Lending institutions have specific criteria when lending funds charged on leasehold property. Some will simply not lend at all once an unexpired lease term drops under a specified unexpired lease term. Many Mortgage lenders will not regard property with a remaining below seventy years as adequate security. As well as this being important when selling, it is also relevant where you are seeking to remortgage your Battlesbridge home.
| Lender |
Requirement
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| 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.
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| Barclays plc |
Leases with less than 70 years at the commencement of the mortgage are not acceptable.
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;
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| Leeds Building Society |
85 years remaining from the start of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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What makes us experts in Battlesbridge lease extensions?
The conveyancing solicitors that we work with handle Battlesbridge 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.
Battlesbridge Lease Extension Case Summaries:
Aiden, Battlesbridge, Essex,
Aiden was the the leasehold proprietor of a 2 bedroom flat in Battlesbridge being marketed with a lease of a few days over 61 years outstanding. Aiden informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Aiden to exercise his statutory right. Aiden procured expert legal guidance and was able to make an informed judgement and deal with the matter and sell the property.
Battlesbridge case:
Mrs Erin Watson acquired a purpose-built flat in Battlesbridge in October 2008. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Similar premises in Battlesbridge with 100 year plus lease were worth £250,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease ran out on 5 January 2095. Taking into account 69 years unexpired we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.
Battlesbridge case:
Mrs Millie Clarke was assigned a lease of a purpose-built flat in Battlesbridge in July 2006. We are asked if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Identical flats in Battlesbridge with a long lease were worth £290,000. The average ground rent payable was £60 invoiced quarterly. The lease terminated in 2106. Taking into account 80 years outstanding we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus legals.