When it comes to residential leasehold property in Honor Oak, you are actually purchasing a right to reside in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are less than 80 years left. Anyone in Honor Oak with a lease approaching 81 years unexpired should seriously consider extending it sooner as opposed to later. When the lease term has under eighty years outstanding, under the relevant Act the landlord can calculate and charge a greater amount, assessed on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Honor Oak 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 lawyer we work with provide it.
Leon owned a high value flat in Honor Oak on the market with a lease of a little over 61 years outstanding. Leon informally contacted his freeholder a well known local-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 initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Leon to exercise his statutory right. Leon obtained expert advice and secured satisfactory deal without resorting to tribunal and readily saleable.
Last Summer we were phoned by Dr S Brooks , who was assigned a lease of a ground floor apartment in Honor Oak in October 2002. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Identical homes in Honor Oak with an extended lease were valued about £285,000. The average ground rent payable was £45 billed per annum. The lease expiry date was on 28 June 2098. Taking into account 72 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus fees.
An example of a Lease Extension decision for a Honor Oak premises 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 remaining number of years on the lease was 61.81 years.