Norwood leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Norwood residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Norwood you should see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle 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 lawyer we work with provide it.
Trailing unsuccessful discussions with the freeholder of her basement flat in Norwood, Chantelle started the lease extension process as the 80 year threshold was quickly approaching. The lease extension was concluded in July 2008. The freeholder’s charges were kept to an absolute minimum.
Last January we were called by Dr C González , who moved into a recently refurbished flat in Norwood in March 2004. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Comparative residencies in Norwood with an extended lease were worth £260,000. The mid-range amount of ground rent was £50 collected monthly. The lease concluded in 2098. Taking into account 72 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
Last March we were approach by Mr F Hall , who acquired a one bedroom flat in Norwood in January 2003. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Identical properties in Norwood with 100 year plus lease were in the region of £261,600. The average amount of ground rent was £60 collected yearly. The lease finished in 2078. Given that there were 52 years unexpired we calculated the premium to the freeholder for the lease extension to be between £39,000 and £45,000 plus legals.