On the balance of probabilities where you own a flat in Islington you actually own a long leasehold interest over your property
Leasehold premises in Islington with over one hundred 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 home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Yorkshire 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. |
The conveyancers that we work with procure Islington 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.
In recent months Jack, came seriously near to the eighty-year threshold with the lease on his first floor flat in Islington. In buying his property 19 years ago, the unexpired term was of minimal significance. Luckily, he became aware that he needed to take action soon on Extending the lease. Jack was able to extend his lease just ahead of time in May. Jack and the landlord eventually settled on an amount of £6,000 . If he not met the deadline, the amount would have increased by a minimum £900.
Last Christmas we were e-mailed by Mrs Emma André , who bought a first floor flat in Islington in April 2005. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparable properties in Islington with a long lease were worth £200,000. The mid-range ground rent payable was £50 collected monthly. The lease ran out on 26 May 2104. Given that there were 78 years unexpired we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including expenses.
An example of a Lease Extension matter before the tribunal for a Islington flat 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 related to 1 flat. The unexpired term as at the valuation date was 80.5 years.