The nearer a residential lease in New Beckenham nears to zero years unexpired, the more it reduces the value of the property. Where the lease has, in excess of 100 years to run then this decrease may be of little impact however there will become a point in time when a lease has fewer than 80 years left as part of the premium you will incur is what is known 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. Many flat owners in New Beckenham will qualify for this right; nevertheless a conveyancing solicitor should be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold premises in New Beckenham with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in New Beckenham,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Beckenham valuers.
Last October Aarav, came precariously close to the 80-year threshold with the lease on his basement apartment in New Beckenham. Having purchased his home two decades ago, the unexpired term was of minimal interest. Thankfully, he became aware that he needed to take steps soon on a lease extension. Aarav extended the lease at the eleventh hour last September. Aarav and the landlord in the end settled on sum of £5,500 . If the lease had gone lower than 80 years, the sum would have increased by at least £1,150.
Last Autumn we were e-mailed by Ms Hannah Thomas , who completed a basement apartment in New Beckenham in September 2001. We are asked if we could approximate the price would be to extend the lease by ninety years. Comparable residencies in New Beckenham with 100 year plus lease were valued about £300,000. The average ground rent payable was £50 billed monthly. The lease came to a finish in 2101. Considering the 76 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a New Beckenham premises is 26 Manor Road in July 2010. the Tribunal decided that price to be paid for the freehold was £12,420 This case affected 2 flats. The unexpired term as at the valuation date was 76.75 and 88.83.