The closer a residential lease in Highbury nears to zero years unexpired, the more it reduces the value of the property. Where the lease has, beyond 100 years remaining then this decrease may be of little impact that being said there will become a point in time when a lease has fewer than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should consider extending sooner as opposed to later. Most flat owners in Highbury will qualify for this right; that being said a lawyer will be able to advise whether you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Highbury 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.
Felix owned a conversion flat in Highbury on the market with a lease of fraction over 59 years left. Felix informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be payable on a lease extension were Felix to invoke his statutory right. Felix obtained expert advice and secured an acceptable resolution informally and ending up with a market value flat.
Last month we were phoned by Mrs Naomi White , who completed a studio flat in Highbury in March 2008. The dilemma was if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable homes in Highbury with 100 year plus lease were valued around £220,400. The mid-range amount of ground rent was £45 billed monthly. The lease concluded in 2089. Considering the 64 years unexpired we estimated the premium to the freeholder to extend the lease to be between £16,200 and £18,600 not including legals.
An example of a Lease Extension matter before the tribunal for a Highbury residence is Lower Flat 16A Beatty Road in September 2012. The premium payable was £13,577. The terms of the lease has been agreed between the Applicants and the First Respondent and the Tribunal did not seek to disturb that agreement. This case related to 1 flat.