There is no doubt about it a leasehold property in High Holborn is a wasting asset as a result of the shortening lease. Where the lease has, in excess of 100 years remaining then this decrease may be fractional that being said there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main logic behind why you should extend the lease without delay. The majority of flat owners in High Holborn will meet the qualifying criteria; however a conveyancer can confirm if you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold properties in High Holborn with over 100 years left on the lease are sometimes 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 upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your High Holborn leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Luke, started to get near to the eighty-year threshold with the lease on his purpose- built apartment in High Holborn. In buying his flat two decades ago, the lease term was of no bearing. Thankfully, he recognised he needed to take steps soon on Extending the lease. Luke was able to extend his lease just under the wire in January. Luke and the landlord in the end agreed on an amount of £5,000 . If the lease had dropped lower than eighty years, the premium would have escalated by at least £1,050.
Last May we were e-mailed by Mr and Mrs. K Lefèvre , who acquired a first floor apartment in High Holborn in April 2010. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Identical flats in High Holborn with an extended lease were in the region of £257,800. The mid-range ground rent payable was £65 collected every twelve months. The lease terminated in 2090. Taking into account 65 years left we estimated the premium to the landlord to extend the lease to be within £18,100 and £20,800 not including fees.
An example of a Lease Extension decision for a High Holborn flat is Flat 89 Trinity Court Grays Inn Road in February 2013. the Tribunal found that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993 should be £36,229. This case affected 1 flat. The unexpired residue of the current lease was 66.8 years.