Homerton leases on residential properties are gradually losing value. if your lease has approximately ninety years remaining, you should start thinking about a lease extension. If lease term is under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Homerton will usually be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In some circumstances you may not qualify. There are also strict deadlines and steps to follow once the process has commenced so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Homerton leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Leo owned a studio apartment in Homerton being marketed with a lease of just over fifty eight years left. Leo informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Last November we were approach by Mr Lucas Morris , who acquired a ground floor apartment in Homerton in July 2010. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by 90 years. Identical properties in Homerton with a long lease were worth £264,000. The mid-range amount of ground rent was £60 collected quarterly. The lease expired in 2078. Considering the 53 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £37,100 and £42,800 exclusive of legals.
An example of a Freehold Enfranchisement decision for a Homerton property is 104 Nightingale Road in May 2009. The Tribunal's Decision is that the premium torbe paid for the enfranchisement in this case is £112,174 This case related to 10 flats. The unexpired term as at the valuation date was 71.25 years.