Unfortunately that a Forest Hill residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Forest Hill property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term dips below 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Forest Hill will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold properties in Forest Hill with more than one hundred years outstanding on the lease are often 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 buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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. |
Using our service will provide you enhanced control over the value of your Forest Hill leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Arthur was the the leasehold owner of a conversion flat in Forest Hill on the market with a lease of a few days over 59 years unexpired. Arthur on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. 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 £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Arthur to exercise his statutory right. Arthur obtained expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last Winter we were called by Mr and Mrs. L Morris , who purchased a garden apartment in Forest Hill in October 1999. The dilemma was if we could approximate the price would be for a 90 year lease extension. Identical homes in Forest Hill with 100 year plus lease were in the region of £203,200. The average amount of ground rent was £65 billed quarterly. The lease ended in 2085. Taking into account 61 years remaining we calculated the premium to the freeholder to extend the lease to be within £19,000 and £22,000 not including expenses.
An example of a Lease Extension matter before the tribunal for a Forest Hill property is Flat 1 40-42 Ewelme Road in August 2012. the Tribunal assessed the premium for the lease extension in the sum of £11,800 This case affected 1 flat. The unexpired lease term was 61.81 years.