Unfortunately that a Herne Hill residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Herne Hill property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Herne Hill will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the process.
Leasehold properties in Herne Hill with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you better control over the value of your Herne Hill leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Teddy, started to get close to the 80-year threshold with the lease on his studio apartment in Herne Hill. Having purchased his flat 19 years ago, the unexpired term was of no significance. by good luck, he became aware that he would imminently be paying an inflated amount for Extending the lease. Teddy arranged for a lease extension just under the wire in May. Teddy and the freeholder via the management company in the end settled on sum of £6,000 . If he had missed the deadline, the premium would have increased by at least £1,150.
Last July we were phoned by Ms Imogen Alexander , who bought a first floor flat in Herne Hill in April 2000. We are asked if we could estimate the price could be for a ninety year lease extension. Comparative premises in Herne Hill with a long lease were valued around £243,000. The average ground rent payable was £65 collected per annum. The lease expired in 2089. Considering the 63 years unexpired we estimated the premium to the landlord for the lease extension to be within £20,000 and £23,000 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Herne 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 was in relation to 3 flats. The unexpired term as at the valuation date was 72.58 years.