The market value of Herne Hill leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the remaining term is less than eighty years
Leasehold premises in Herne Hill with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service gives you enhanced control over the value of your Herne Hill leasehold, as your property will be more valuable and saleable in relation to the lease length should you want 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.
Oscar was the the leasehold proprietor of a high value apartment in Herne Hill being sold with a lease of just over 59 years unexpired. Oscar informally contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Oscar to exercise his statutory right. Oscar obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
In 2014 we were phoned by Mr and Mrs. L Lefebvre who, having completed a basement apartment in Herne Hill in January 2009. The question was if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Comparative residencies in Herne Hill with an extended lease were worth £233,200. The average amount of ground rent was £60 invoiced every twelve months. The lease expired on 6 February 2086. Considering the 61 years left we approximated the compensation to the freeholder for the lease extension to be within £22,800 and £26,400 exclusive of expenses.
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 was in relation to 3 flats. The unexpired term was 72.58 years.