Denmark Hill leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Denmark Hill tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Denmark Hill you must investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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 |
| Yorkshire 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. |
The lawyers that we work with procure Denmark 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 year Kian, came dangerously near to the eighty-year mark with the lease on his one bedroom flat in Denmark Hill. Having bought his property two decades ago, the lease term was of minimal concern. Luckily, he realised he needed to take action soon on Extending the lease. Kian was able to extend his lease at the eleventh hour in July. Kian and the landlord eventually settled on the final figure of £6,000 . If he failed to meet the deadline, the amount would have escalated by at least £1,075.
Mr and Mrs. I Bernard purchased a recently refurbished flat in Denmark Hill in February 1995. The question was if we could estimate the price would be for a 90 year extension to my lease. Comparable flats in Denmark Hill with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 billed quarterly. The lease came to a finish in 2098. Having 73 years left we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
An example of a Freehold Enfranchisement decision for a Denmark Hill property is 66 Southwell Road in March 2012. By Order of Deputy District Judge Stone dated 25 January 2012 a vesting order was made. The determination of the purchase price was referred to the Tribunal who decided that the amount payable for the freehold should be£29,612.00 This case related to 3 flats. The unexpired residue of the current lease was 72.58 years.