Penge leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Penge tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Penge you must see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Penge with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance 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. |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
Irrespective of whether you are a tenant or a freeholder in Penge,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Penge valuers.
Edward owned a 2 bedroom flat in Penge on the market with a lease of a little over 61 years unexpired. Edward informally spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Edward to invoke his statutory right. Edward obtained expert advice and secured an acceptable deal informally and readily saleable.
Dr N Brooks acquired a newly refurbished flat in Penge in July 1995. We are asked if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Penge with a long lease were worth £233,200. The mid-range amount of ground rent was £60 billed every twelve months. The lease lapsed on 8 August 2087. Having 61 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £22,800 and £26,400 exclusive of fees.
An example of a Lease Extension decision for a Penge premises 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.