Unfortunately that a Norbury residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Norbury property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be due. Most leasehold owners in Norbury will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Norbury,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Norbury valuers.
Reuben owned a studio flat in Norbury being marketed with a lease of fraction over sixty years remaining. Reuben on an informal basis contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be payable on a lease extension were Reuben to exercise his statutory right. Reuben procured expert legal guidance and secured an acceptable deal informally and sell the property.
Mr and Mrs. B David owned a studio apartment in Norbury in September 2003. The dilemma was if we could estimate the price would be to extend the lease by 90 years. Identical flats in Norbury with an extended lease were in the region of £295,000. The mid-range ground rent payable was £45 billed every twelve months. The lease end date was in 2099. Taking into account 74 years remaining we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
An example of a Lease Extension matter before the tribunal for a Norbury property 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 number of years remaining on the existing lease(s) was 23.25 years.