The closer a residential lease in Denmark Hill gets to zero years unexpired, the more it reduces the value of the property. If the residual term has, more than 99 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner rather than later. Most flat owners in Denmark Hill will meet the qualifying criteria; that being said a conveyancing solicitor can advise whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold premises in Denmark Hill with over 100 years outstanding on the lease are often 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 buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a landlord in Denmark Hill,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Denmark Hill valuers.
Jackson owned a high value flat in Denmark Hill on the market with a lease of fraction over sixty years remaining. Jackson on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Jackson to exercise his statutory right. Jackson procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the flat.
In 2010 we were called by Mr V André who, having owned a studio apartment in Denmark Hill in February 2004. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Similar premises in Denmark Hill with a long lease were in the region of £260,000. The average ground rent payable was £50 billed every twelve months. The lease terminated on 7 June 2097. Given that there were 72 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.
An example of a Freehold Enfranchisement decision for a Denmark Hill premises is 66 Southwell Road in March 2012. By Order of Deputy District Judge Stone dated 25 January 2012 a vesting order was made. The determination of the purchase price was referred to the Tribunal who decided that the amount payable for the freehold should be£29,612.00 This case affected 3 flats. The unexpired term was 72.58 years.