Purley residential property held on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
Leasehold properties in Purley with more than 100 years remaining on the lease are often regarded as a ‘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 upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Purley 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 conveyancer we work with provide it.
In the wake of eight months of lengthy correspondence with the landlord of her basement apartment in Purley, Alicia initiated the lease extension process as the eighty year deadline was swiftly approaching. The transaction was concluded in February 2008. The landlord’s fees were kept to an absolute minimum.
In 2012 we were contacted by Mr Jacob Thompson who, having owned a basement flat in Purley in August 2012. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Similar properties in Purley with an extended lease were valued about £275,000. The average amount of ground rent was £55 billed quarterly. The lease lapsed on 7 March 2101. Considering the 76 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.
An example of a Freehold Enfranchisement case for a Purley residence 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.