Peckham residential property held on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 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 |
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Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
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. |
Halifax | Minimum 70 years from the date of the mortgage. |
Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Peckham,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 Peckham valuers.
Joshua owned a studio apartment in Peckham on the market with a lease of just over 59 years remaining. Joshua informally approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. 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 payable on a lease extension were Joshua to exercise his statutory right. Joshua obtained expert advice and secured an acceptable resolution without going to tribunal and sell the flat.
Last July we were called by Mrs Jasmine Stewart , who owned a first floor flat in Peckham in September 2011. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Similar premises in Peckham with a long lease were in the region of £243,000. The average ground rent payable was £65 invoiced annually. The lease terminated in 2087. Having 63 years outstanding we estimated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 plus legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Peckham flat is 31 Kings Grove in January 2012. By a claim form issued on 11" August 2011 under action number 1LB01618 in the Lambeth County Court the applicant tenants sought dispensation under section 26 of the Leasehold Reform, Housing and Urban Development Act 1993 from the requirement to serve a notice under section 13 of that Act in order to purchase the freehold of the premises. The Tribunal decided the amount payable for the freehold as £10,728 This case affected 2 flats. The unexpired term as at the valuation date was 80.5 years.