When it comes to residential leasehold property in Forest Hill, you are actually buying an entitlement to reside in a property for a set period of time. Modern 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 as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than 80 years remaining. Anyone in Forest Hill with a lease nearing 81 years unexpired should seriously consider extending it sooner than later. When a lease has below eighty years remaining, under the relevant legislation the landlord can calculate and charge a larger amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold premises in Forest Hill with over 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 home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date 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. |
| 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 conveyancing solicitors that we work with undertake Forest 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 conveyancing solicitor we work with provide it.
James owned a conversion apartment in Forest Hill being sold with a lease of just over 59 years outstanding. James informally contacted his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. No ground rent would be due on a lease extension were James to exercise his statutory right. James obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
Last Summer we were approach by Mr Seth Bell , who owned a first floor apartment in Forest Hill in September 1998. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Comparative properties in Forest Hill with 100 year plus lease were valued around £270,000. The average ground rent payable was £55 collected monthly. The lease ended on 1 August 2100. Taking into account 74 years outstanding we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.
An example of a Lease Extension decision 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.