It’s an underpublicised truth that a Colindale residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Colindale property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining falls below 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Colindale will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold premises in Colindale with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Colindale 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.
Joseph was the the leasehold proprietor of a 2 bedroom flat in Colindale being marketed with a lease of a few days over sixty years remaining. Joseph informally approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Joseph to exercise his statutory right. Joseph obtained expert advice and secured satisfactory resolution informally and readily saleable.
Mr U Ward purchased a purpose-built flat in Colindale in April 2004. The dilemma was if we could estimate the premium would be for a 90 year extension to my lease. Similar homes in Colindale with a long lease were worth £260,000. The average ground rent payable was £50 collected monthly. The lease ran out in 2097. Considering the 71 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Colindale residence is 27B Hillside in February 2010. the resulting premium, all other aspects of the valuation having been agreed between the parties was set at £8,250 This case was in relation to 1 flat. The unexpired residue of the current lease was 70.25 years.