For anyone whose Buckhurst Hill property is held on a long lease, our message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Buckhurst Hill 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.
Last October Alex, started to get close to the eighty-year mark with the lease on his studio apartment in Buckhurst Hill. Having purchased his home 19 years ago, the unexpired term was of no importance. Thankfully, he became aware that he would soon be paying way over the odds for Extending the lease. Alex was able to extend his lease just under the wire in September. Alex and the freeholder in the end settled on a premium of £5,000 . If the lease had descended below 80 years, the price would have escalated by a minimum £900.
Mr and Mrs. T Cox took over the lease of a one bedroom apartment in Buckhurst Hill in January 1998. We are asked if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Comparable premises in Buckhurst Hill with an extended lease were valued around £166,400. The mid-range ground rent payable was £60 billed yearly. The lease ran out in 2079. Considering the 54 years remaining we estimated the premium to the landlord to extend the lease to be between £32,300 and £37,400 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Buckhurst Hill premises is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case was in relation to 2 flats. The unexpired residue of the current lease was 69.26 years.