Sydenham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Sydenham tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Sydenham you would be well advised to see if your lease has between seventy and ninety years left. There are compelling reasons why a Sydenham leaseholder with a lease having around 80 years left should take action to make sure that a lease extension is actioned without delay
Leasehold properties in Sydenham with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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. |
| 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. |
Retaining our service gives you enhanced control over the value of your Sydenham leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Alex, started to get close to the 80-year mark with the lease on his basement apartment in Sydenham. Having bought his property two decades ago, the lease term was of little interest. Luckily, he became aware that he needed to take action soon on a lease extension. Alex was able to extend his lease just under the wire in April. Alex and the landlord who owned the flat above eventually settled on an amount of £5,500 . If the lease had slipped to less than eighty years, the premium would have escalated by at least £900.
In 2013 we were approached by Mr Tommy Bernard who, having acquired a studio apartment in Sydenham in August 2003. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable residencies in Sydenham with an extended lease were in the region of £200,800. The average amount of ground rent was £65 collected annually. The lease came to a finish in 2085. Having 60 years remaining we approximated the premium to the landlord to extend the lease to be between £20,900 and £24,200 plus expenses.
An example of a Lease Extension decision for a Sydenham property is Flat 1 4 Border Crescent in March 2012. the Tribunal decided that the sum payable by the Applicants to the Respondent in respect of the new lease for the subject property should be £11,616.00 (ElevenThousand and Six Hundred and Sixteen Pounds) This case affected 1 flat. The unexpired residue of the current lease was 72.04 years.