Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Balham. Clearly, the term of lease left reduces as time goes by. This is often ignored and only becomes a problem when the property has to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Balham have the right to extend the lease for an additional 90 years under legislation. Do give due consideration before delaying your Balham lease extension. Holding off the cost now simply increases the price you will ultimately have to pay for a lease extension
It is generally accepted that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you better control over the value of your Balham leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jonathan owned a conversion apartment in Balham being marketed with a lease of fraction over 61 years unexpired. Jonathan informally spoke with his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jonathan to exercise his statutory right. Jonathan obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2013 we were phoned by Mr and Mrs. L Pérez who, having owned a garden apartment in Balham in January 2008. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Identical premises in Balham with 100 year plus lease were valued around £200,800. The average amount of ground rent was £65 invoiced yearly. The lease expiry date was on 22 January 2085. Having 60 years remaining we approximated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 plus expenses.
An example of a Lease Extension case for a Balham property is First Floor Flat 152a Ramsden Road in June 2009. The net result of the tribunals calculation produced a premium payable of £23,975. This case affected 1 flat. The unexpired term as at the valuation date was 56.67 years.