Forest Hill leases on residential properties are gradually losing value. if your lease has about 90 years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to take place before the term of the current lease dips under eighty years - otherwise a higher premium will be payable. Flat owners in Forest Hill will mostly be legally entitled to a lease extension; however a solicitor should be able check your eligibility. In some situations you may not qualify. There are prescribed timetables and steps to comply with once the process has commenced so it’s wise to be guided by a lawyer during the process.
Leasehold properties in Forest Hill with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of 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 procure 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 lawyer we work with provide it.
Twenty four months ago Eliot, came very near to the eighty-year mark with the lease on his leasehold flat in Forest Hill. In buying his property 18 years previously, the length of the lease was of minimal significance. Thankfully, he realised he needed to take steps soon on a lease extension. Eliot was able to extend his lease at the eleventh hour last May. Eliot and the freeholder eventually settled on an amount of £5,000 . If the lease had gone below 80 years, the figure would have become more costly by a minimum £1,150.
Last May we were phoned by Mr and Mrs. P Watson , who purchased a purpose-built apartment in Forest Hill in June 2007. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative premises in Forest Hill with an extended lease were worth £285,000. The average ground rent payable was £55 invoiced monthly. The lease expiry date was in 2104. Having 79 years remaining we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Forest Hill flat 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 was in relation to 1 flat. The unexpired term as at the valuation date was 61.81 years.