Catford leases on residential properties are gradually losing value. Where your lease has in the region of ninety years left, you should start considering the need for a lease extension. 80 years is a significant number: when the unexpired term of a lease dips below this level then you start paying an additional element called marriage value. Flat owners in Catford will usually qualify for a lease extension; however It would be wise to check with a lawyer to confirm if you qualify. In some situations you may not qualify. There are also strict deadlines and formalities to comply with once the process is triggered so it’s wise to be guided by a conveyancer during the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
Engaging our service gives you better control over the value of your Catford leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Archie, started to get close to the 80-year mark with the lease on his leasehold apartment in Catford. In buying his home two decades ago, the length of the lease was of little importance. Fortunately, he realised he would imminently be paying an escalated premium for Extending the lease. Archie extended the lease just ahead of time in April. Archie and the freeholder via the managing agents ultimately agreed on sum of £5,000 . If the lease had fallen to less than 80 years, the figure would have become more exhorbitant by a minimum £1,000.
In 2013 we were e-mailed by Dr G Rodríguez who, having acquired a recently refurbished apartment in Catford in April 2005. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Identical premises in Catford with a long lease were worth £166,400. The mid-range amount of ground rent was £60 collected annually. The lease terminated in 2079. Considering the 54 years unexpired we estimated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 plus expenses.
An example of a Freehold Enfranchisement decision for a Catford premises is 44 Elmer Road in January 2013. The Tribunal dacied that amount to be paid by the Leaseholders for the Landlords freehold reversion was £12,951 as at the valuation date (20" September 2012).This matter was referred back to the Bromley County Court to deal with costs, fees and any other outstanding matters. This case was in relation to 2 flats. The unexpired term as at the valuation date was 74.25 years.