There is no doubt about it a leasehold property in Denmark Hill is a wasting asset as a result of the diminishing lease term. If the residual term has, over one hundred years remaining then this decrease may be of little impact that being said there will become a stage when a lease has less than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending sooner rather than later. Most flat owners in Denmark Hill will meet the qualifying criteria; however a conveyancing solicitor should be able to confirm whether you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold properties in Denmark Hill with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
|Barclays plc||Mortgage term plus 25 years|
|Lloyds TSB Scotland|| Mortgage term plus 30 years subject to an overall minimum term of 70 years|
|Nationwide Building Society|| Our minimum unexpired lease term is 55 years subject to at least 30 years remaining at the end of the mortgage term.|
Report to the issuing office if the lease term is shorter than that stated on the offer and has less than 100 years remaining. (There is no requirement to report if the lease term is lower than that stated on the offer but still has 100 years or more to run, or if the lease term is longer than that stated on the offer).
NEW BUILD PROPERTIES (includes office conversions)
The following are not acceptable:
- The unexpired lease term is less than 125 years on a new build flat or 250 years on a new build house (does not apply to Shared Ownership)
- Starting ground rent is more than 0.1% of the property value
The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed.
Ground rents and event fees:
Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us.
|Skipton Building Society|| 85 years from the date of completion of the mortgage |
|TSB||Mortgage term plus 30 years subject to an overall minimum term of 70 years|
Engaging our service gives you better control over the value of your Denmark Hill leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Michael, came precariously close to the 80-year mark with the lease on his studio flat in Denmark Hill. Having bought his property twenty years ago, the lease term was of little relevance. Thankfully, he became aware that he would soon be paying an inflated amount for Extending the lease. Michael extended the lease just in the nick of time in March. Michael and the freeholder eventually agreed on a premium of £6,000 . If the lease had fallen below 80 years, the amount would have become more costly by at least £900.
In 2012 we were approached by Dr Poppy Wilson who, having owned a ground floor flat in Denmark Hill in June 2002. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable properties in Denmark Hill with an extended lease were in the region of £260,000. The mid-range ground rent payable was £50 invoiced yearly. The lease expired in 2092. Considering the 73 years remaining we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Denmark Hill property 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 related to 3 flats. The unexpired term was 72.58 years.