It’s an underpublicised certainty that a Orpington residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Orpington property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher amount will be due. Most leasehold owners in Orpington will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in Orpington with more than 100 years outstanding 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| 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. |
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Lease extensions in Orpington can be a difficult process. We recommend you procure guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Orpington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
18 months ago Tyler, started to get close to the eighty-year threshold with the lease on his studio flat in Orpington. Having purchased his flat 18 years previously, the unexpired term was of no interest. Fortunately, he realised he needed to take action soon on a lease extension. Tyler extended the lease just under the wire in April. Tyler and the landlord who owned the flat above in the end agreed on the final figure of £6,000 . If he failed to meet the deadline, the price would have become more costly by a minimum £925.
Mr and Mrs. O Pérez was assigned a lease of a purpose-built flat in Orpington in June 2001. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar homes in Orpington with 100 year plus lease were in the region of £233,200. The average ground rent payable was £60 collected per annum. The lease expired in 2086. Given that there were 61 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £22,800 and £26,400 not including fees.
An example of a Lease Extension decision for a Orpington residence is 1 Southlands Court Southlands Road in September 2013. The Leasehold Valuation Tribunal determined that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 was £30,541 This case was in relation to 1 flat. The unexpired term was 50.57 years.