Islington leases on residential deteriorating in value. Where your lease has about ninety years left, you should start considering the need for a lease extension. If lease term falls under 80 years, you will then have to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Islington will mostly qualify for a lease extension; however a solicitor should be able check if you qualify. In certain situations you may not be entitled. There are prescribed timetables and steps to comply with once the process has commenced so it’s wise to be guided by a lawyer during the process.
Leasehold properties in Islington with over 100 years left 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 to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Islington can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer 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 in-depth market knowledge procuring Islington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Isaac owned a studio flat in Islington being marketed with a lease of a few days over fifty eight years left. Isaac on an informal basis approached his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be due on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and was able to make an informed decision and deal with the matter and readily saleable.
In 2012 we were called by Mr W González who, having purchased a studio apartment in Islington in August 2001. The question was if we could approximate the price could be to extend the lease by ninety years. Comparative properties in Islington with 100 year plus lease were worth £216,000. The average ground rent payable was £60 collected quarterly. The lease came to a finish on 28 August 2082. Having 58 years remaining we estimated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including costs.
An example of a Lease Extension decision for a Islington premises is 5C Stoke Newington Road in April 2010. the Tribunal therefore concludes that the premium to be paid for the extended lease is £700.00 This case affected 1 flat. The number of years remaining on the existing lease(s) was 80.5 years.