It’s an underpublicised certainty that a Penge residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Penge property market.Where your lease has approximately ninety years left, 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 dips lower than eighty years - otherwise a higher amount will be due. Most leasehold owners in Penge will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Penge,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Penge valuers.
Isaac was the the leasehold owner of a 2 bedroom flat in Penge being sold with a lease of a little over 61 years remaining. Isaac informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and secured an acceptable resolution without resorting to tribunal and sell the flat.
Last Christmas we were e-mailed by Dr Kyle Campbell , who was assigned a lease of a first floor flat in Penge in November 2011. The question was if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Identical premises in Penge with 100 year plus lease were worth £243,000. The mid-range amount of ground rent was £65 billed every twelve months. The lease ended in 2089. Having 63 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Penge flat is Flats 5, 9, 38 & 40 Blakewood Court Anerley Park in January 2012. the tribunal held that the premiums payable for the new lease sare: FLAT 5:- £7,130 FLAT 9:- £7,860 FLAT 38:- £15,867 FLAT 40: £14,834 This case was in relation to 4 flats.