The market value of Hendon leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Hendon,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hendon valuers.
Off the back of unsuccessful negotiations with the landlord of her ground floor flat in Hendon, Anna initiated the lease extension process just as the lease was approaching the critical eighty-year deadline. The lease extension completed in August 2005. The landlord’s costs were restricted to a tad over 500 GBP.
Mrs Erin Cook completed a ground floor apartment in Hendon in February 2012. The question was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar properties in Hendon with a long lease were worth £166,800. The mid-range ground rent payable was £50 invoiced quarterly. The lease came to a finish in 2075. Given that there were 50 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of professional charges.
An example of a Lease Extension case for a Hendon residence is First Floor Flat 61 Wilberforce Road in March 2014. The premium payable was £10,130 and the case was remitted back to the Willesden County Court to effect the Vesting Order (Claim No 3W103100). This case related to 1 flat. The unexpired residue of the current lease was 71 years.