The market value of a leasehold property in Honor Oak is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is ideal to start the lease extension process when the lease still has 82 years remaining so that a lease extension can be addressed in advance of the 80 year cut off point. Statute entitles Honor Oak qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Lease extensions in Honor Oak can be a difficult process. We recommend you get guidance from a lawyer 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 Honor Oak lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Joseph owned a studio flat in Honor Oak on the market with a lease of a little over 61 years unexpired. Joseph on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. No ground rent would be due on a lease extension were Joseph to invoke his statutory right. Joseph obtained expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
Mr and Mrs. E Martinez acquired a one bedroom flat in Honor Oak in July 2008. The question was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparable properties in Honor Oak with a long lease were in the region of £198,800. The average amount of ground rent was £55 collected quarterly. The lease came to a finish in 2081. Taking into account 55 years remaining we estimated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 plus costs.
An example of a Lease Extension case for a Honor Oak property is Flat 1 40-42 Ewelme Road in August 2012. the Tribunal assessed the premium for the lease extension in the sum of £11,800 This case was in relation to 1 flat. The unexpired term as at the valuation date was 61.81 years.