Balham leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Most owners of residential leasehold property in Balham enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Balham you must investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Balham with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Balham can be a difficult process. We recommend you secure guidance from a conveyancing solicitor 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 Balham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Twenty four months ago Finn, started to get near to the 80-year mark with the lease on his ground floor flat in Balham. In buying his home twenty years ago, the length of the lease was of minimal significance. Thankfully, it dawned on him that he needed to take action soon on a lease extension. Finn arranged for a lease extension just ahead of time in April. Finn and the freeholder subsequently agreed on the final figure of £6,000 . If he failed to meet the deadline, the amount would have gone up by at least £925.
Last June we were e-mailed by Mrs I Michel , who owned a first floor flat in Balham in April 1997. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Similar premises in Balham with an extended lease were valued about £255,000. The average ground rent payable was £50 collected yearly. The lease ran out in 2096. Taking into account 70 years remaining we approximated the compensation to the freeholder to extend the lease to be within £10,500 and £12,000 not including costs.
An example of a Lease Extension matter before the tribunal for a Balham residence 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 related to 1 flat. The unexpired residue of the current lease was 56.67 years.