When it comes to domestic leasehold premises in Norbury, you are actually buying a right to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are less than 80 years remaining. Leasehold owners in Norbury with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once the lease term has less than eighty years left, under the relevant Act the freeholder can calculate and demand a larger premium, based on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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. |
| Yorkshire 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. |
The conveyancers that we work with procure Norbury lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Subsequent to lengthy negotiations with the landlord of her first floor apartment in Norbury, Paige started the lease extension process as the 80 year mark was fast coming. The transaction was concluded in June 2011. The freeholder’s charges were negotiated to slightly above 500 GBP.
In 2011 we were called by Mrs F Nelson who, having purchased a garden flat in Norbury in May 2005. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Similar flats in Norbury with 100 year plus lease were in the region of £205,000. The average amount of ground rent was £50 invoiced monthly. The lease ended on 14 November 2103. Considering the 78 years outstanding we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Norbury property is Flat 12, Newlands Court Streatham Common North in May 2012. the decision of the Tribunal was that the premium payable by the Applicants to the Respondent for the new lease of the Premises be £70,140. This case related to 1 flat. The number of years remaining on the existing lease(s) was 23.25 years.