If you are facing a significant premium because your lease in Streatham has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Streatham lease extension today:
Increase your lease and increase your Streatham property value
Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Streatham. Clearly, the period of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the property needs to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Qualifying leaseholders in Streatham have the legal entitlement to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. Please give careful consideration before putting off your Streatham lease extension. Putting off that expense now simply increases the price you will ultimately have to pay for a lease extension
Streatham property with a lease extension is almost the same value as a freehold
Leasehold residencies in Streatham with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
Banks and Building Societies will not finance a property on a short lease
Lenders are really restricting their approach as regards to homes in Streatham with short leases. For instance you may find that their lending requirements are stricter and that they adjust interest rates depending on how many years are left on the lease. Some may even refrain from lending completely, so if you needed to sell, your remaining options would be to find a cash buyer, or try your luck at auction thus limiting the amount of prospective buyers.
| Lender |
Requirement
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|---|
| National Westminster Bank |
Mortgage term plus 30 years.
For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage.
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| Santander |
If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. 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.
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.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| Royal Bank of Scotland |
Mortgage term plus 30 years.
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| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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Get in touch with one of our Streatham lease extension solicitors or enfranchisement solicitors
Lease extensions in Streatham can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
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 a wealth of experience dealing with Streatham lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Streatham Lease Extension Example Cases:
Isaac, Streatham, South London
During the course of the last few months Isaac, came precariously near to the eighty-year mark with the lease on his garden apartment in Streatham. In buying his property 18 years ago, the length of the lease was of no significance. Thankfully, he realised he would soon be paying an escalated premium for Extending the lease. Isaac arranged for a lease extension at the eleventh hour in April. Isaac and the freeholder subsequently agreed on a premium of £6,000 . If the lease had gone lower than 80 years, the premium would have escalated by a minimum £1,100.
Streatham case:
Mr Charlie Walker was assigned a lease of a ground floor apartment in Streatham in June 2000. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by 90 years. Identical flats in Streatham with a long lease were worth £235,200. The average ground rent payable was £45 collected monthly. The lease terminated on 9 September 2092. Given that there were 66 years left we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including professional charges.
Decision in Lambeth
An example of a Lease Extension case for a Streatham residence 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 was in relation to 1 flat. The unexpired term as at the valuation date was 23.25 years.