For those whose South London flat is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
It is generally accepted that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
| 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 London can be a difficult process. We recommend you secure guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
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 a wealth of experience dealing with South London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Noah, started to get close to the eighty-year threshold with the lease on his garden apartment in South London. Having purchased his home two decades ago, the unexpired term was of little concern. As luck would have it, he noticed he would imminently be paying way over the odds for a lease extension. Noah extended the lease at the eleventh hour in September. Noah and the freeholder via the management company subsequently settled on the final figure of £6,000 . If he failed to meet the deadline, the price would have gone up by at least £1,100.
In 2010 we were approached by Dr B Rodríguez who, having took over the lease of a recently refurbished flat in South London in October 2007. The question was if we could approximate the price would be for a ninety year extension to my lease. Comparable properties in South London with a long lease were valued around £200,000. The average amount of ground rent was £50 billed monthly. The lease finished on 26 January 2103. Having 78 years unexpired we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including costs.
An example of a Lease Extension case for a South London property is Flat B 10 Grove Avenue in October 2013. Following a vesting order Clerkenwell and Shoreditch County Court 3rd July 2013 The tribunal determines that the premium payable for the lease extension was £36,215.00 This case was in relation to 1 flat. The remaining number of years on the lease was 65.21 years.