Totteridge leases on domestic deteriorating in value. if your lease has approximately ninety years remaining, you should start thinking about a lease extension. If lease term is less than eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Totteridge will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm if you qualify. In some situations you may not be entitled. There are also strict deadlines and formalities to follow once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over one hundred 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 left, 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. |
| 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; |
| Birmingham Midshires | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you increased control over the value of your Totteridge leasehold, as your property will be more valuable and marketable in respect of lease length should you decide 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.
Last year Connor, started to get near to the 80-year threshold with the lease on his studio apartment in Totteridge. Having purchased his property 18 years previously, the lease term was of minimal relevance. Luckily, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Connor arranged for a lease extension at the eleventh hour last January. Connor and the freeholder via the managing agents in the end settled on a premium of £5,000 . If the lease had gone lower than 80 years, the amount would have become more costly by at least £1,100.
Mr Felix Nguyen purchased a purpose-built apartment in Totteridge in April 2002. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar premises in Totteridge with a long lease were in the region of £260,200. The mid-range ground rent payable was £65 collected quarterly. The lease lapsed in 2092. Taking into account 66 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £16,200 and £18,600 plus costs.
An example of a Lease Extension case for a Totteridge premises 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.