Beckenham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Beckenham residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Beckenham you should investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Beckenham with more than 100 years unexpired on the lease are sometimes referred to as ‘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 freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Beckenham leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Nathaniel, came dangerously close to the 80-year threshold with the lease on his first floor flat in Beckenham. In buying his flat twenty years ago, the unexpired term was of little significance. by good luck, it dawned on him that he needed to take action soon on Extending the lease. Nathaniel extended the lease at the eleventh hour last July. Nathaniel and the freeholder via the managing agents eventually settled on sum of £5,000 . If the lease had fallen to less than eighty years, the price would have increased by at least £1,150.
Mr Nathaniel García acquired a studio flat in Beckenham in August 2007. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Similar premises in Beckenham with 100 year plus lease were worth £260,200. The mid-range amount of ground rent was £65 collected yearly. The lease came to a finish in 2092. Given that there were 66 years remaining we calculated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 plus legals.
An example of a Freehold Enfranchisement decision for a Beckenham property is 26 Manor Road in July 2010. the Tribunal decided that price to be paid for the freehold was £12,420 This case related to 2 flats. The remaining number of years on the lease was 76.75 and 88.83.