It’s an underpublicised certainty that a Peckham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Peckham property prices.Once your lease gets to 85ish years, 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 falls lower than 80 years - otherwise a higher amount will be due. Most leasehold owners in Peckham will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold properties in Peckham with in excess of 100 years outstanding 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 to be gained by purchasing the freehold unless savings on ground rent and estate charges justify 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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. |
Retaining our service will provide you better control over the value of your Peckham leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months James, came dangerously near to the 80-year threshold with the lease on his one bedroom apartment in Peckham. In buying his flat two decades ago, the length of the lease was of little concern. Fortunately, he noticed he needed to take steps soon on Extending the lease. James arranged for a lease extension just in the nick of time last January. James and the landlord in the end agreed on sum of £5,000 . If the lease had gone to less than eighty years, the sum would have gone up by at least £1,100.
Last Christmas we were e-mailed by Mr and Mrs. Y Roberts , who purchased a recently refurbished apartment in Peckham in November 1998. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Comparable properties in Peckham with 100 year plus lease were in the region of £171,800. The mid-range ground rent payable was £55 invoiced every twelve months. The lease came to a finish on 24 October 2076. Taking into account 50 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £33,300 and £38,400 exclusive of legals.
An example of a Freehold Enfranchisement matter before the tribunal 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.