There is no doubt about it a leasehold flat or house in Herne Hill is a wasting asset as a result of the diminishing lease term. Where the lease has, in excess of 100 years to run then this decrease may be negligible however there will become a point in time when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should consider extending without delay. Most flat owners in Herne Hill will meet the qualifying criteria; that being said a lawyer should be able to advise whether you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in Herne Hill with over one hundred 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 property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you enhanced 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 want 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 2014 George, started to get close to the eighty-year mark with the lease on his garden flat in Herne Hill. In buying his property two decades ago, the lease term was of little importance. Thankfully, he recognised he needed to take steps soon on Extending the lease. George extended the lease at the eleventh hour last March. George and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If the lease had dipped below eighty years, the premium would have gone up by at least £850.
In 2012 we were approached by Mrs L Ricardo who, having bought a first floor flat in Herne Hill in March 2012. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative homes in Herne Hill with a long lease were in the region of £171,800. The average amount of ground rent was £55 invoiced every twelve months. The lease end date was in 2075. Having 50 years remaining we approximated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 plus costs.
An example of a Freehold Enfranchisement case 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 number of years remaining on the existing lease(s) was 72.58 years.