With a domestic leasehold premises in Camden, you are in fact renting it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than eighty years remaining. Residents in Camden with a lease drawing near to 81 years unexpired should seriously consider extending it sooner than later. Once a lease has below 80 years outstanding, under the relevant legislation the landlord can calculate and demand a greater premium, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle Camden 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.
Jude was the the leasehold proprietor of a conversion flat in Camden on the market with a lease of fraction over 72 years remaining. Jude informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Jude to invoke his statutory right. Jude procured expert legal guidance and secured an acceptable resolution informally and sell the flat.
Last year we were contacted by Mr and Mrs. M Robinson , who owned a basement apartment in Camden in October 2002. We are asked if we could approximate the premium would be to extend the lease by an additional years. Identical flats in Camden with an extended lease were in the region of £210,000. The mid-range amount of ground rent was £50 billed annually. The lease expired in 2106. Taking into account 80 years unexpired we estimated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including costs.
An example of a Lease Extension matter before the tribunal for a Camden property is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case related to 1 flat. The remaining number of years on the lease was 64.77 years.