Norbury leases on residential properties are gradually losing value. Where your lease has about 90 years unexpired, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease dips below this level then you begin paying an additional element called marriage value. Leasehold owners in Norbury will usually qualify for a lease extension; however a solicitor should be able check your eligibility. In certain cases you may not be entitled. There are also strict deadlines and formalities to follow once the process has started so it’s wise to be guided by a lawyer during the process.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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. |
| 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 conveyancing solicitors that we work with undertake Norbury 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 conveyancer we work with provide it.
Tyler owned a 2 bedroom flat in Norbury being marketed with a lease of a few days over 72 years unexpired. Tyler informally contacted his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Tyler to invoke his statutory right. Tyler obtained expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
Mr Samuel Cox completed a one bedroom flat in Norbury in January 2007. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Comparable properties in Norbury with an extended lease were worth £174,200. The average amount of ground rent was £55 billed yearly. The lease concluded in 2076. Given that there were 51 years outstanding we estimated the premium to the landlord for the lease extension to be within £31,400 and £36,200 not including legals.
An example of a Lease Extension decision for a Norbury residence is Flat 12, Newlands Court Streatham Common North in May 2012. the decision of the Tribunal was that the premium payable by the Applicants to the Respondent for the new lease of the Premises be £70,140. This case affected 1 flat. The unexpired residue of the current lease was 23.25 years.