With a domestic leasehold property in Balham, you are actually buying a right to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than eighty years left. Leasehold owners in Balham with a lease approaching 81 years remaining should seriously think of extending it without delay. When the lease term has under 80 years outstanding, under the current statute the freeholder can calculate and charge a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Balham 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.
After protracted correspondence with the freeholder of her two bedroom apartment in Balham, Isobel started the lease extension process just as the lease was nearing the all-important eighty-year mark. The lease extension completed in April 2013. The freeholder’s costs were negotiated to slightly above 500 GBP.
In 2013 we were phoned by Dr Y Thomas who, having took over the lease of a first floor apartment in Balham in July 2006. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparable residencies in Balham with an extended lease were valued about £255,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease expiry date was on 13 May 2096. Considering the 71 years as a residual term we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.
An example of a Lease Extension decision for a Balham property is First Floor Flat 152a Ramsden Road in June 2009. The net result of the tribunals calculation produced a premium payable of £23,975. This case affected 1 flat. The remaining number of years on the lease was 56.67 years.