When it comes to domestic leasehold property in Herne Hill, you are actually buying a right to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are fewer than eighty years left. Leasehold owners in Herne Hill with a lease nearing 81 years left should seriously think of extending it sooner as opposed to later. Once the lease term has below 80 years left, under the relevant Act the freeholder is entitled to calculate and charge a greater premium, based on a technical multiplication, known as “marriage value” which is payable.
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Lease extensions in Herne Hill can be a difficult process. We recommend you get guidance from a lawyer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Herne Hill lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Dylan owned a 2 bedroom flat in Herne Hill being marketed with a lease of a few days over 72 years remaining. Dylan informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Dylan to invoke his statutory right. Dylan procured expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2014 we were e-mailed by Mrs Kate Lefebvre who, having moved into a one bedroom flat in Herne Hill in September 2000. The question was if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Comparative premises in Herne Hill with 100 year plus lease were worth £200,000. The mid-range amount of ground rent was £50 invoiced annually. The lease expired on 5 August 2102. Considering the 77 years left we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.
An example of a Freehold Enfranchisement case for a Herne Hill residence 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 number of years remaining on the existing lease(s) was 72.58 years.