As the the remaining lease term of a Peckham residential lease lessens so does its value and therefore the value of your property. Where the lease has, in excess of one hundred years remaining then this decrease may be of little impact that being said there will become a stage when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease without delay. The majority of flat owners in Peckham will qualify for this right; however a conveyancer can advise if you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold premises in Peckham with over 100 years remaining on the lease are often referred to as ‘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 freehold unless savings on ground rent and estate 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 lawyers that we work with procure Peckham 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.
Hugo owned a conversion apartment in Peckham being marketed with a lease of a few days over 72 years outstanding. Hugo on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Hugo to invoke his statutory right. Hugo obtained expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Last Winter we were phoned by Mrs Ashleigh Bell , who moved into a one bedroom apartment in Peckham in October 2003. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Identical premises in Peckham with a long lease were valued about £275,000. The average amount of ground rent was £65 invoiced annually. The lease ran out on 4 February 2093. Taking into account 68 years remaining we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of expenses.
An example of a Freehold Enfranchisement decision for a Peckham residence is 31 Kings Grove in January 2012. By a claim form issued on 11" August 2011 under action number 1LB01618 in the Lambeth County Court the applicant tenants sought dispensation under section 26 of the Leasehold Reform, Housing and Urban Development Act 1993 from the requirement to serve a notice under section 13 of that Act in order to purchase the freehold of the premises. The Tribunal decided the amount payable for the freehold as £10,728 This case related to 2 flats. The unexpired residue of the current lease was 80.5 years.