For those whose Herne Hill flat is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| 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 |
| 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. |
Engaging our service will provide you increased control over the value of your Herne Hill leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Henry, started to get near to the 80-year mark with the lease on his one bedroom apartment in Herne Hill. In buying his home two decades ago, the lease term was of no importance. by good luck, he realised he needed to take action soon on Extending the lease. Henry arranged for a lease extension just ahead of time in July. Henry and the landlord subsequently agreed on a premium of £6,000 . If the lease had dropped below 80 years, the amount would have escalated by at least £1,000.
In 2013 we were e-mailed by Ms Abigail Rose who, having completed a studio apartment in Herne Hill in January 2002. We are asked if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Comparable homes in Herne Hill with 100 year plus lease were worth £223,400. The average amount of ground rent was £60 collected annually. The lease ended in 2085. Taking into account 59 years as a residual term we approximated the premium to the landlord for the lease extension to be within £27,600 and £31,800 exclusive of costs.
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 affected 3 flats. The unexpired term was 72.58 years.