The closer a domestic lease in Highbury nears to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, more than one hundred years to run then this decrease may be of little impact that being said there will become a stage when a lease has under than 80 years remaining 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 rational as to why you should consider extending without delay. The majority of flat owners in Highbury will qualify for this right; however a conveyancing solicitor will be able to confirm whether you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in Highbury with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle 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 conveyancing solicitor we work with provide it.
In 2014 Max, came perilously close to the 80-year threshold with the lease on his studio flat in Highbury. In buying his property two decades ago, the length of the lease was of minimal bearing. As luck would have it, he recognised he would imminently be paying way over the odds for a lease extension. Max arranged for a lease extension just in the nick of time last May. Max and the landlord who owned the flat above subsequently settled on the final figure of £5,000 . If the lease had dropped lower than 80 years, the amount would have become more exhorbitant by at least £1,150.
In 2011 we were called by Mr and Mrs. F Díaz who, having took over the lease of a one bedroom apartment in Highbury in April 2004. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Identical flats in Highbury with a long lease were worth £270,000. The mid-range ground rent payable was £55 billed quarterly. The lease terminated in 2100. Having 75 years unexpired we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
An example of a Lease Extension decision for a Highbury premises 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.