Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Norbury. Clearly, the length of lease left reduces over time. This is often overlooked and only raises itself as an issue when the flat or house needs to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Eligible long lease owners in Norbury have the legal entitlement to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. You should give due consideration before delaying your Norbury lease extension. Putting off the cost now likely increases the price you will ultimately have to pay to extend your lease
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | 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. |
The lawyers that we work with handle 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 conveyancing solicitor we work with provide it.
Last Spring Harry, came perilously near to the 80-year threshold with the lease on his basement flat in Norbury. In buying his home two decades ago, the lease term was of no bearing. As luck would have it, he recognised he would imminently be paying an inflated amount for a lease extension. Harry extended the lease at the eleventh hour in August. Harry and the freeholder via the management company eventually agreed on a premium of £6,000 . If he not met the deadline, the premium would have gone up by at least £1,050.
In 2012 we were phoned by Mr and Mrs. C Girard who, having completed a first floor apartment in Norbury in April 2001. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by an additional years. Comparable homes in Norbury with a long lease were in the region of £189,000. The mid-range ground rent payable was £55 collected monthly. The lease ended on 24 June 2078. Considering the 53 years unexpired we calculated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 not including fees.
An example of a Lease Extension matter before the tribunal for a Norbury premises 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 related to 1 flat. The unexpired term was 23.25 years.