It’s a harsh truth that a Totteridge residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Totteridge property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining falls under 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Totteridge will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Totteridge,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Totteridge valuers.
Ben owned a 2 bedroom flat in Totteridge being sold with a lease of just over fifty eight years outstanding. Ben on an informal basis contacted his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Ben to exercise his statutory right. Ben obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
In 2011 we were approached by Mr and Mrs. I Leroy who, having purchased a basement apartment in Totteridge in January 1997. We are asked if we could estimate the premium would likely be to prolong the lease by 90 years. Comparable homes in Totteridge with an extended lease were in the region of £240,600. The average amount of ground rent was £60 invoiced monthly. The lease elapsed in 2088. Having 62 years unexpired we estimated the compensation to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of professional charges.
An example of a Lease Extension matter before the tribunal for a Totteridge residence is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case related to 1 flat. The unexpired term as at the valuation date was 76 years.