The value of Bowes Park leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the unexpired lease term is less than eighty years
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the property will be equivalent in value to 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle Bowes Park 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 conveyancer we work with provide it.
In the wake of 6 months of lengthy discussions with the freeholder of her garden apartment in Bowes Park, Mia started the lease extension process just as the lease was coming close to the critical eighty-year mark. The transaction was finalised in February 2008. The freeholder’s charges were kept to an absolute minimum.
Last Winter we were contacted by Dr W Collins , who bought a one bedroom apartment in Bowes Park in May 2003. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Similar residencies in Bowes Park with 100 year plus lease were valued about £280,000. The mid-range amount of ground rent was £45 collected quarterly. The lease ran out on 25 September 2095. Having 70 years remaining we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus expenses.
An example of a Lease Extension decision for a Bowes Park residence 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 remaining number of years on the lease was 81.79 years.