It’s an underpublicised certainty that a Pentonville residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Pentonville property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term dips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Pentonville will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in Pentonville with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value 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 |
|---|---|
| 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. |
| 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. |
| 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. |
Retaining our service will provide you better control over the value of your Pentonville leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of protracted discussions with the landlord of her garden flat in Pentonville, Holly commenced the lease extension process just as the lease was coming close to the crucial 80-year threshold. The legal work was finalised in September 2014. The freeholder’s costs were negotiated to slightly above 450 GBP.
In 2009 we were approached by Ms W Davis who, having completed a one bedroom flat in Pentonville in May 1996. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical homes in Pentonville with an extended lease were valued about £223,400. The mid-range ground rent payable was £60 collected per annum. The lease came to a finish in 2084. Given that there were 59 years unexpired we approximated the premium to the landlord for the lease extension to be between £27,600 and £31,800 plus expenses.
An example of a Lease Extension matter before the tribunal for a Pentonville property is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case related to 1 flat. The unexpired lease term was 66.8 years.