It’s a harsh certainty that a Ponders End residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Ponders End property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term slips under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Ponders End will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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. |
Using our service gives you increased control over the value of your Ponders End leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of protracted correspondence with the landlord of her two bedroom flat in Ponders End, Georgina initiated the lease extension process just as the lease was coming close to the all-important 80-year threshold. The lease extension was finalised in November 2015. The landlord’s charges were restricted to a tad over 600 pounds.
Ms Stephanie Robinson bought a one bedroom flat in Ponders End in June 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by a further 90 years. Comparable properties in Ponders End with 100 year plus lease were valued about £200,000. The mid-range ground rent payable was £50 collected quarterly. The lease terminated on 3 August 2102. Taking into account 77 years outstanding we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.
An example of a Vesting Order and Purchase of freehold decision for a Ponders End residence is Ground Floor Flat 4A Baronet Road in February 2010. Following a vesting order by Edmonton County Court on 23rd December 2008 (case number 8ED064) the Tribunal decided that the price that the Applicant for the freehold interest should pay is £8,689.00 This case was in relation to 2 flats. The unexpired lease term was 80.01 years.