Finchley leases on residential properties are gradually losing value. if your lease has in the region of ninety years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for your lease extension to be in place before the term of the current lease falls below 80 years - otherwise a higher premium will be payable. Flat owners in Finchley will mostly qualify for a lease extension; however It would be wise to check with a lawyer to check your eligibility. In some circumstances you may not be entitled. There are also strict timetables and procedures to follow once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
The lawyers that we work with handle Finchley 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.
Half a year ago Ali, started to get close to the eighty-year mark with the lease on his garden flat in Finchley. In buying his home two decades ago, the unexpired term was of little significance. Fortunately, he realised he would soon be paying an inflated amount for Extending the lease. Ali was able to extend his lease just ahead of time last April. Ali and the landlord who owned the flat above subsequently settled on an amount of £6,000 . If he not met the deadline, the price would have increased by at least £1,150.
In 2011 we were phoned by Dr Teddy Sharif who, having took over the lease of a first floor flat in Finchley in August 2000. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable homes in Finchley with an extended lease were in the region of £205,000. The average amount of ground rent was £50 collected every twelve months. The lease expired in 2104. Having 78 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £7,600 and £8,800 exclusive of legals.
An example of a Lease Extension decision for a Finchley property is Ground Floor 110 Station Road in June 2013. The Tribunal found that the premium payable for a lease extension should be £31,665. This case related to 1 flat. The unexpired residue of the current lease was 56.65 years.