When it comes to long leasehold property in South Norwood, you effectively rent it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than 80 years remaining. Anyone in South Norwood with a lease approaching 81 years unexpired should seriously consider extending it without delay. When the lease term has under 80 years left, under the current legislation the freeholder can calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in South Norwood with over one hundred years outstanding 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 property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure South Norwood 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 conveyancing solicitor we work with provide it.
Last October Liam, started to get near to the eighty-year threshold with the lease on his ground floor flat in South Norwood. In buying his home two decades ago, the length of the lease was of minimal bearing. Thankfully, he noticed he would soon be paying an inflated amount for a lease extension. Liam was able to extend his lease just under the wire in January. Liam and the landlord who owned the flat above eventually agreed on a premium of £5,000 . If he failed to meet the deadline, the price would have escalated by at least £1,075.
In 2012 we were approached by Mr B Wright who, having moved into a one bedroom apartment in South Norwood in May 2001. We are asked if we could estimate the premium would likely be to prolong the lease by 90 years. Comparable properties in South Norwood with a long lease were in the region of £200,800. The mid-range ground rent payable was £65 invoiced per annum. The lease expired in 2085. Considering the 60 years remaining we estimated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of professional charges.
An example of a Lease Extension decision for a South Norwood property is Flats 55, 67 & 70 Melbourne Court Anerley Road in July 2013. The tribunal calculated that the premium for the extended lease at £48,366.00 for at 55, and £88,329.00 for ats 67 and 70 combined. This case related to 1 flat. The unexpired residue of the current lease was 26.38 years.