The only way is down when it comes to Norwood lease terms. Norwood flats that have a lease term lower than eighty years will de-escalate in market price even faster, and the cost of extending your lease will rise.
It is generally considered that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Norwood 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 conveyancing solicitor we work with provide it.
George owned a high value apartment in Norwood being marketed with a lease of a few days over sixty years unexpired. George on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to grant 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 increase every 25 years thereafter. No ground rent would be due on a lease extension were George to exercise his statutory right. George procured expert advice and secured an acceptable deal without going to tribunal and readily saleable.
In 2013 we were contacted by Mr U Davis who, having completed a basement apartment in Norwood in November 1999. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparable residencies in Norwood with 100 year plus lease were in the region of £191,000. The average ground rent payable was £65 collected yearly. The lease came to a finish on 7 March 2083. Given that there were 58 years outstanding we calculated the compensation to the landlord to extend the lease to be within £23,800 and £27,400 not including fees.
Ms Harriet Mitchell was assigned a lease of a first floor apartment in Norwood in June 1995. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparative premises in Norwood with 100 year plus lease were valued around £250,000. The mid-range ground rent payable was £50 billed yearly. The lease expired on 5 August 2094. Given that there were 69 years remaining we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.