There is no doubt about it a leasehold flat or house in Peckham is a wasting asset as a result of the diminishing lease term. Where the residual term has, beyond one hundred years remaining then this decrease may be of little impact nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main reason why you should extend the lease sooner than later. Most flat owners in Peckham will meet the qualifying criteria; nevertheless a lawyer can advise whether you qualify to extend your lease. 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.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Peckham,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Peckham valuers.
Edward owned a 2 bedroom flat in Peckham on the market with a lease of a few days over 59 years remaining. Edward informally spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Edward to invoke his statutory right. Edward obtained expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2009 we were contacted by Mr and Mrs. N Cook who, having bought a purpose-built flat in Peckham in October 2003. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Similar residencies in Peckham with 100 year plus lease were worth £267,600. The average amount of ground rent was £65 collected monthly. The lease lapsed in 2091. Having 67 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £14,300 and £16,400 not including legals.
An example of a Freehold Enfranchisement case 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 was in relation to 2 flats. The unexpired lease term was 80.5 years.