Finsbury Park leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Finsbury Park tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Finsbury Park you should investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Finsbury Park with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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 Finsbury 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 lawyer we work with provide it.
Half a year ago Ethan, came precariously near to the eighty-year mark with the lease on his basement flat in Finsbury Park. Having bought his home 18 years ago, the unexpired term was of no relevance. As luck would have it, he recognised he would soon be paying an inflated amount for a lease extension. Ethan was able to extend his lease at the eleventh hour last April. Ethan and the freeholder via the managing agents in the end agreed on an amount of £5,000 . If he failed to meet the deadline, the price would have gone up by at least £900.
Dr Anna Lefebvre owned a basement flat in Finsbury Park in November 2011. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Identical premises in Finsbury Park with 100 year plus lease were in the region of £257,800. The average amount of ground rent was £65 billed per annum. The lease elapsed on 11 February 2091. Given that there were 65 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 not including professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Finsbury Park premises is 51 Lorne Road in November 2009. The price Payable as decided by the tribunal for the freehold reversion was £27,000. The valuation follows the order of the County Court made on 3 April 2008 granting a vesting order. This case was in relation to 1 flat. The unexpired lease term was 71 years.