The value of Highbury leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the unexpired lease term is below than eighty years
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 procure Highbury 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 conveyancer we work with provide it.
Off the back of unsuccessful negotiations with the freeholder of her one bedroom flat in Highbury, Sophia initiated the lease extension process just as the lease was approaching the crucial eighty-year deadline. The lease extension was concluded in February 2010. The freeholder’s charges were kept to an absolute minimum.
In 2010 we were e-mailed by Dr Kyle Martin who, having bought a first floor apartment in Highbury in August 1999. We are asked if we could estimate the price could be for a ninety year lease extension. Comparative residencies in Highbury with a long lease were worth £285,000. The mid-range ground rent payable was £55 collected annually. The lease ended on 5 April 2104. Having 79 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus expenses.
An example of a Lease Extension case for a Highbury property is Lower Flat 16A Beatty Road in September 2012. The premium payable was £13,577. The terms of the lease has been agreed between the Applicants and the First Respondent and the Tribunal did not seek to disturb that agreement. This case affected 1 flat.