Main reasons to start your Pentonville lease extension
<div class="lm-topic lm-topic-lender">
<p>
<h3>
Why you should start your Pentonville lease extension today: </h3>
<h4>
Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/pentonville">Pentonville</a> property value </h4>
<p> The market value of a leasehold property in Pentonville is impacted by how long the lease has left to run. If it is close to or less than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. Ideally one should start the process of extending the lease is when the lease still has 82 years unexpired so that all matters can be addressed ahead of the 80 year threshold. Current legislation entitles Pentonville qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension. <h4>Pentonville property with a lease extension is almost the same value as a freehold</h4>
<p> It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
<h4>Lenders will not issue a mortgage with a short lease</h4>
The propensity since over the last decade has been for mortgage companies to tighten lending criteria across the board - this has extended to the types of security over which the mortgage is to be charged. This has meant the unexpired lease term required by banks has increased. Historically banks were content with twenty years plus the term of the loan - routinely 50 year leases but those requirements evolved by the requirement for lengthy leases - many use a minimum term of 75 years as a prerequisite.
<p>
<div class="row">
<div class="col-sm-8">
<table class="table table-striped table-condensed">
<thead>
<tr><th>Lender</th>
<th> Requirement
</thead>
<tbody>
<tr>
<td>Birmingham Midshires</td>
<td> Minimum 70 years from the date of the mortgage.
</tr>
<tr>
<td>Coventry Building Society</td>
<td> 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.
</tr>
<tr>
<td>Leeds Building Society</td>
<td> 85 years remaining from the start of the mortgage.
</tr>
<tr>
<td>Lloyds TSB Scotland</td>
<td> Minimum 70 years from the date of the mortgage.
</tr>
<tr>
<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
</tr>
</tbody>
</table>
</div>
</div>
<h4>
Why use us for your lease extension in Pentonville? </h4>
<p> Using our service will provide you better control over the value of your Pentonville leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell.
The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions. <h4>
Pentonville Lease Extension Example Cases:
</h4>
<h5> Georgina, Pentonville, North London,</h5>
<p> Off the back of unsuccessful correspondence with the landlord of her two bedroom apartment in Pentonville, Georgina initiated the lease extension process just as her lease was approaching the all-important 80-year mark. The lease extension completed in October 2014. The landlord’s fees were kept to an absolute minimum.
<h5>Pentonville case:</h5>
<p> Mr and Mrs. Y Collins was assigned a lease of a purpose-built apartment in Pentonville in April 2005. The question was if we could estimate the price would be to extend the lease by ninety years. Comparable flats in Pentonville with 100 year plus lease were worth £205,000. The average ground rent payable was £50 collected monthly. The lease ran out in 2105. Taking into account 79 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of fees.
<div> <h5>Decision in Camden</h5>
<p>
An example of a Lease Extension decision for a Pentonville flat 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 was in relation to 1 flat. The number of years remaining on the existing lease(s) was 66.8 years.
</p>
</div>
</div>