Highbury leases on residential properties are gradually losing value. Where your lease has about ninety years remaining, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to be in place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be due. Leasehold owners in Highbury will usually be legally entitled to a lease extension; however It would be wise to check with a conveyancer to check if you qualify. In certain cases you may not be entitled. There are prescribed timetables and steps to follow once the process has commenced so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Highbury with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth 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 service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 lawyers 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.
Ryan was the the leasehold owner of a conversion apartment in Highbury being sold with a lease of just over 72 years remaining. Ryan informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Ryan to exercise his statutory right. Ryan procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2012 we were approached by Mrs E Bertrand who, having purchased a one bedroom apartment in Highbury in June 1998. The question was if we could approximate the price would likely be for a 90 year lease extension. Identical residencies in Highbury with a long lease were valued around £280,000. The average amount of ground rent was £55 invoiced per annum. The lease terminated in 2103. Having 78 years unexpired we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including costs.
An example of a Lease Extension decision for a Highbury flat 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.