With a domestic leasehold property in Streatham, you are in fact renting it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than 80 years remaining. Anyone in Streatham with a lease approaching 81 years unexpired should seriously consider extending it without delay. Once a lease has below eighty years outstanding, under the current statute the freeholder can calculate and demand a larger amount, based on a technical multiplication, known as “marriage value” which is due.
Leasehold premises in Streatham with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
Lender | Requirement |
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Bank of Scotland | Minimum 70 years from the date of the mortgage. |
Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
Halifax | Minimum 70 years from the date of the mortgage. |
Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The conveyancing solicitors that we work with undertake Streatham 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.
Liam owned a 2 bedroom apartment in Streatham on the market with a lease of a few days over 72 years outstanding. Liam on an informal basis approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Liam to exercise his statutory right. Liam obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
In 2013 we were called by Mr T Rose who, having acquired a one bedroom flat in Streatham in September 2012. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by 90 years. Comparable flats in Streatham with an extended lease were in the region of £265,000. The average ground rent payable was £55 billed quarterly. The lease lapsed on 9 September 2098. Considering the 74 years outstanding we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.
An example of a Lease Extension decision for a Streatham flat is Flat 12, Newlands Court Streatham Common North in May 2012. the decision of the Tribunal was that the premium payable by the Applicants to the Respondent for the new lease of the Premises be £70,140. This case affected 1 flat. The unexpired residue of the current lease was 23.25 years.