The re-sale value of a leasehold property in Bush Hill Park depends on how long the lease has left to run. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that all matters can be concluded prior to the 80 year threshold. Statute entitles Bush Hill Park qualifying lessees to an additional term of ninety years over and above the existing term, at a notional rent (no ground rent). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property 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 remaining, the premises 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Bush Hill 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.
14 months ago Jasper, came critically close to the 80-year threshold with the lease on his first floor flat in Bush Hill Park. In buying his home 19 years ago, the lease term was of little interest. Fortunately, he realised he would imminently be paying an escalated premium for a lease extension. Jasper extended the lease just ahead of time last June. Jasper and the freeholder subsequently settled on an amount of £6,000 . If he not met the deadline, the price would have gone up by at least £850.
Mr M Hill acquired a one bedroom flat in Bush Hill Park in September 2000. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparable residencies in Bush Hill Park with 100 year plus lease were worth £270,000. The average amount of ground rent was £55 collected every twelve months. The lease terminated in 2101. Given that there were 76 years left we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Bush Hill Park 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 remaining number of years on the lease was 81.79 years.