Wood Green leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Wood Green tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Wood Green you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Wood Green with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Wood Green 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.
Last October Muhammad, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Wood Green. In buying his flat two decades ago, the unexpired term was of minimal concern. As luck would have it, he recognised he needed to take steps soon on a lease extension. Muhammad was able to extend his lease just ahead of time in September. Muhammad and the freeholder via the management company ultimately settled on a premium of £6,000 . If he failed to meet the deadline, the premium would have increased by a minimum £1,000.
In 2012 we were phoned by Ms B François who, having took over the lease of a ground floor apartment in Wood Green in October 1996. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Comparable residencies in Wood Green with 100 year plus lease were valued about £265,000. The mid-range amount of ground rent was £50 billed monthly. The lease terminated on 23 August 2099. Considering the 73 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Wood Green premises is First Floor Flat 109 Lyndhurst Road in May 2010. Following a vesting order by Edmonton County Court on 29th October 2009 the Tribunal decided on a figure of £5,012 for a lease extension. This case affected 1 flat. The unexpired term as at the valuation date was 81.79 years.