South Lambeth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most South Lambeth tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in South Lambeth you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in South Lambeth with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you increased control over the value of your South Lambeth leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Alexander, started to get near to the eighty-year mark with the lease on his purpose- built apartment in South Lambeth. In buying his property 18 years previously, the lease term was of no interest. Thankfully, he became aware that he needed to take steps soon on a lease extension. Alexander extended the lease just under the wire last May. Alexander and the freeholder via the managing agents eventually agreed on an amount of £5,500 . If he had missed the deadline, the price would have increased by at least £850.
In 2011 we were phoned by Dr I Hill who, having moved into a one bedroom apartment in South Lambeth in July 2006. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparable homes in South Lambeth with an extended lease were worth £191,000. The average ground rent payable was £65 billed annually. The lease expired in 2084. Considering the 58 years remaining we calculated the compensation to the landlord for the lease extension to be within £23,800 and £27,400 exclusive of legals.
Mr Joseph Lee bought a one bedroom flat in South Lambeth in August 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Identical properties in South Lambeth with an extended lease were in the region of £250,000. The mid-range ground rent payable was £50 collected yearly. The lease lapsed in 2095. Taking into account 69 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.