The re-sale value of a leasehold property in South East London depends on how many years the lease has left to run. If it is close to or less than 80 years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension ahead of purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be concluded prior to the eighty year cut off point. Leasehold Reform legislation entitles South East London qualifying lessees to obtain a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in South East London with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing 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. |
| Bank of Scotland | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you enhanced control over the value of your South East London leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy negotiations with the freeholder of her purpose-built flat in South East London, Georgia initiated the lease extension process just as her lease was coming close to the all-important eighty-year mark. The transaction was concluded in June 2015. The freeholder’s costs were restricted to below four hundred pounds.
Mr and Mrs. K Cook purchased a ground floor flat in South East London in September 2009. The question was if we could approximate the premium would be for a ninety year extension to my lease. Comparable residencies in South East London with a long lease were in the region of £200,800. The average amount of ground rent was £65 invoiced annually. The lease came to a finish on 9 October 2086. Having 60 years as a residual term we approximated the premium to the landlord for the lease extension to be between £20,900 and £24,200 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a South East London property is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case related to 1 flat. The unexpired term was 73.26 years.