South East London residential property held on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
Leasehold residencies in South East London with more than 100 years left 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 premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Lease extensions in South East London can be a difficult process. We recommend you obtain professional help from a conveyancer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with South East London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Finley, came dangerously near to the 80-year mark with the lease on his basement flat in South East London. In buying his property two decades ago, the length of the lease was of little concern. by good luck, he noticed he would soon be paying an inflated amount for Extending the lease. Finley extended the lease just ahead of time last August. Finley and the landlord in the end settled on an amount of £5,000 . If he had missed the deadline, the figure would have increased by at least £875.
Dr Rachael López moved into a purpose-built flat in South East London in January 2012. We are asked if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Similar properties in South East London with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease lapsed on 3 February 2102. Considering the 77 years remaining we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of costs.
An example of a Freehold Enfranchisement case for a South East London premises 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 as at the valuation date was 73.26 years.