Homerton leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Most owners of residential leasehold property in Homerton enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Homerton you must see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold properties in Homerton with over 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Homerton,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Homerton valuers.
Subsequent to unsuccessful discussions with the freeholder of her garden apartment in Homerton, Jade initiated the lease extension process just as her lease was approaching the crucial 80-year threshold. The legal work completed in February 2008. The freeholder’s charges were kept to an absolute minimum.
Last month we were called by Ms A Murphy , who completed a recently refurbished apartment in Homerton in April 2010. The question was if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Identical premises in Homerton with 100 year plus lease were worth £254,200. The mid-range amount of ground rent was £60 collected annually. The lease terminated on 6 May 2076. Having 51 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 plus professional charges.
An example of a Freehold Enfranchisement case for a Homerton premises is 104 Nightingale Road in May 2009. The Tribunal's Decision is that the premium torbe paid for the enfranchisement in this case is £112,174 This case was in relation to 10 flats. The unexpired residue of the current lease was 71.25 years.