The market value of a leasehold property in Herne Hill is impacted by how long the lease has left to run. If it is near to or less than eighty years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that all matters can be concluded ahead of the eighty year mark. Leasehold Reform legislation enables Herne Hill qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a further term of 90 years. The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Herne Hill with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancers that we work with undertake Herne 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.
16 months ago Jake, came dangerously close to the eighty-year mark with the lease on his basement apartment in Herne Hill. Having bought his home 18 years ago, the length of the lease was of minimal interest. As luck would have it, he noticed he needed to take steps soon on Extending the lease. Jake extended the lease just under the wire last January. Jake and the landlord who owned the flat above subsequently agreed on an amount of £5,000 . If the lease had gone below 80 years, the price would have increased by at least £1,150.
In 2009 we were approached by Mr Henry Davies who, having completed a studio apartment in Herne Hill in October 2005. The question was if we could shed any light on how much (roughly) premium could be to prolong the lease by an additional years. Identical residencies in Herne Hill with 100 year plus lease were valued around £280,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease ended on 18 March 2096. Given that there were 70 years outstanding we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus fees.
An example of a Freehold Enfranchisement case for a Herne Hill flat 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 related to 3 flats. The unexpired residue of the current lease was 72.58 years.