When it comes to residential leasehold premises in Peckham, you are in fact renting it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than 80 years left. Anyone in Peckham with a lease drawing near to 81 years unexpired should seriously think of extending it as soon as possible. Once a lease has below eighty years outstanding, under the current Act the landlord is entitled to calculate and demand a larger premium, based on a technical calculation, strangely termed as “marriage value” which is due.
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service gives 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.
Last year Henry, came perilously near to the 80-year threshold with the lease on his garden flat in Peckham. In buying his property 19 years ago, the unexpired term was of minimal concern. Luckily, he realised he needed to take steps soon on a lease extension. Henry was able to extend his lease just in the nick of time in August. Henry and the landlord subsequently agreed on a premium of £5,000 . If he not met the deadline, the amount would have escalated by a minimum £1,050.
Mrs C Mitchell completed a first floor apartment in Peckham in June 2001. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by ninety years. Identical residencies in Peckham with an extended lease were valued around £216,000. The average ground rent payable was £60 collected yearly. The lease came to a finish in 2084. Taking into account 58 years left we estimated the premium to the landlord for the lease extension to be within £28,500 and £33,000 exclusive of costs.
An example of a Freehold Enfranchisement case for a Peckham premises 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 residue of the current lease was 80.5 years.