The closer a domestic lease in Peckham nears to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, over 99 years remaining then this decrease may be of little impact however there will become a stage when a lease has fewer than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary reason why you should extend the lease without delay. Many flat owners in Peckham will qualify for this right; that being said a lawyer will be able to advise if you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
It is generally accepted that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Halifax | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 handle 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 conveyancer we work with provide it.
Last October James, came precariously close to the 80-year threshold with the lease on his two bedroom apartment in Peckham. Having bought his flat two decades ago, the length of the lease was of minimal significance. Luckily, he became aware that he would imminently be paying an escalated premium for a lease extension. James extended the lease just ahead of time in September. James and the freeholder via the managing agents ultimately settled on a premium of £5,500 . If the lease had dipped below eighty years, the premium would have escalated by a minimum £950.
Last Spring we were phoned by Ms Stephanie Torres , who owned a recently refurbished apartment in Peckham in September 2012. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Comparative residencies in Peckham with 100 year plus lease were valued around £257,800. The average amount of ground rent was £65 billed yearly. The lease ended on 13 June 2091. Taking into account 65 years unexpired we calculated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 plus legals.
An example of a Freehold Enfranchisement case for a Peckham flat 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 was in relation to 2 flats. The unexpired term as at the valuation date was 80.5 years.