Pentonville residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Pentonville 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 conveyancing solicitor we work with provide it.
Jake owned a studio apartment in Pentonville being sold with a lease of a little over 59 years outstanding. Jake on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jake to exercise his statutory right. Jake procured expert advice and secured an acceptable deal informally and ending up with a market value flat.
Last January we were approach by Ms Megan Bailey , who bought a purpose-built flat in Pentonville in July 2005. The dilemma was if we could approximate the premium could be to extend the lease by 90 years. Identical properties in Pentonville with an extended lease were valued around £181,600. The mid-range ground rent payable was £55 billed yearly. The lease concluded in 2078. Taking into account 52 years remaining we calculated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including expenses.
An example of a Lease Extension case 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 unexpired residue of the current lease was 66.8 years.