It’s a harsh certainty that a Herne Hill residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Herne Hill property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under eighty years, you will then be required to pay half of the property's 'marriage value' on top of 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 The majority of flat owners in Herne Hill will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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. |
Retaining our service will provide you enhanced control over the value of your Herne Hill leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of protracted discussions with the freeholder of her studio flat in Herne Hill, Ashleigh commenced the lease extension process as the 80 year mark was swiftly advancing. The lease extension was concluded in August 2010. The freeholder’s fees were kept to an absolute minimum.
Dr Kayleigh Williams acquired a newly refurbished flat in Herne Hill in July 1997. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical residencies in Herne Hill with an extended lease were in the region of £205,000. The average amount of ground rent was £50 invoiced monthly. The lease expiry date was in 2104. Given that there were 78 years remaining we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including costs.
An example of a Freehold Enfranchisement decision 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 affected 3 flats. The unexpired term was 72.58 years.