The market value of a leasehold property in Cockfosters depends on how long the lease has left to run. If it is near to or less than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to start the lease extension process when the lease still has 82 years unexpired so that all matters can be addressed well before the eighty year threshold. Current legislation enables Cockfosters qualifying lessees to an additional term of ninety years on top of the existing term, at a nominal rent (zero ground rent). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Cockfosters 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.
Trailing protracted discussions with the landlord of her studio flat in Cockfosters, Naomi initiated the lease extension process just as the lease was coming close to the crucial eighty-year mark. The lease extension was finalised in May 2014. The landlord’s charges were negotiated to about six hundred GBP.
Mr Samuel Martin moved into a one bedroom flat in Cockfosters in November 2008. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Similar flats in Cockfosters with 100 year plus lease were valued around £205,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease finished in 2104. Given that there were 78 years remaining we approximated the compensation to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Cockfosters property is 23 Beaconsfield Road in July 2013. The Tribunals decided that the amount payable was £31,203 for the freehold. This case related to 2 flats. The unexpired term was 70.31 years.