It’s an underpublicised certainty that a Hornsey residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Hornsey property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be due. The majority of flat owners in Hornsey will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Hornsey leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Luca owned a high value flat in Hornsey being sold with a lease of just over fifty eight years outstanding. Luca informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luca to exercise his statutory right. Luca obtained expert advice and was able to make an informed decision and deal with the matter and sell the flat.
Dr N Thomas acquired a one bedroom flat in Hornsey in May 2012. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by a further 90 years. Similar residencies in Hornsey with an extended lease were worth £265,000. The mid-range amount of ground rent was £55 invoiced annually. The lease finished in 2100. Given that there were 74 years remaining we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.
An example of a Freehold Enfranchisement decision for a Hornsey property is 7 Aubrey Road in December 2010. By an order of the county court on 15/12/2009 the freehold interest inthe Property known as 7 Aubrey Road London N8 9HH (the Property) and registered at HM Land Registry under title number MX439124 was vested in the applicants. The Tribunal calculated that the total enfranchisement premium, assessed in accordance with Schedule 6 to the Act, was £54,633. This case affected 3 flats. The unexpired residue of the current lease was 73.27 years.