With a long leasehold premises in South East London, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater especially once there are less than 80 years remaining. Residents in South East London with a lease drawing near to 81 years unexpired should seriously think of extending it as soon as possible. When the lease term has fewer than eighty years remaining, under the current Act the freeholder can calculate and demand a greater premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
Lease extensions in South East London can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with South East London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following unsuccessful discussions with the landlord of her two bedroom apartment in South East London, Amelia initiated the lease extension process as the 80 year deadline was swiftly coming. The legal work completed in October 2005. The freeholder’s fees were negotiated to about four hundred pounds.
Dr Alice Clark was assigned a lease of a garden flat in South East London in April 2009. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Identical residencies in South East London with 100 year plus lease were worth £191,000. The average amount of ground rent was £65 collected every twelve months. The lease ran out on 24 June 2083. Having 58 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a South East London property is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case affected 1 flat. The number of years remaining on the existing lease(s) was 73.26 years.