Purley leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Purley residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Purley you must check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Purley with more than 100 years unexpired 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Purley can be a difficult process. We recommend you procure professional help 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 Purley lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ibrahim owned a studio apartment in Purley being marketed with a lease of a little over 59 years outstanding. Ibrahim on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ibrahim to exercise his statutory right. Ibrahim procured expert advice and secured satisfactory resolution informally and sell the flat.
In 2010 we were e-mailed by Mr and Mrs. J Martínez who, having took over the lease of a basement apartment in Purley in January 1997. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative premises in Purley with 100 year plus lease were in the region of £168,800. The mid-range amount of ground rent was £60 billed quarterly. The lease concluded on 21 March 2081. Considering the 55 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 plus costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Purley flat is The Woodlands 95 Purley Park Road in April 2009. The Tribunals own valuation produced the figure of £37,912. This case affected 6 flats. The unexpired lease term was 78.32 years.