The market value of South Lambeth leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is less than eighty years
Leasehold premises in South Lambeth with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate 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. |
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake South Lambeth lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Stanley was the the leasehold proprietor of a high value apartment in South Lambeth on the market with a lease of fraction over fifty eight years left. Stanley on an informal basis approached his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Stanley to exercise his statutory right. Stanley procured expert advice and secured an acceptable deal without going to tribunal and sell the flat.
Ms Louise Cook completed a purpose-built flat in South Lambeth in November 2008. The dilemma was if we could estimate the price would be for a ninety year lease extension. Comparable properties in South Lambeth with an extended lease were worth £265,000. The mid-range amount of ground rent was £55 billed yearly. The lease finished in 2100. Taking into account 74 years outstanding we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including professional charges.
Last year we were e-mailed by Dr Ben Harris , who completed a newly refurbished flat in South Lambeth in September 1996. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Similar premises in South Lambeth with 100 year plus lease were valued about £166,400. The mid-range amount of ground rent was £60 billed monthly. The lease ran out on 10 November 2080. Taking into account 54 years remaining we estimated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 plus professional charges.