Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Hornsey. Clearly, the period of lease remaining shortens as time goes by. This is often overlooked and only raises itself as an issue when the property has to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension. Eligible leaseholders in Hornsey have the right to extend the lease for an additional 90 years under legislation. Do give careful attention before delaying your Hornsey lease extension. Holding off the cost now likely increases the price you will ultimately incur for a lease extension
Leasehold premises in Hornsey with over one hundred 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 premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The lawyers that we work with handle Hornsey 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 lawyer we work with provide it.
Reuben was the the leasehold proprietor of a high value flat in Hornsey being marketed with a lease of a little over 61 years remaining. Reuben on an informal basis contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Reuben to exercise his statutory right. Reuben procured expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Dr E Robinson completed a basement flat in Hornsey in September 2006. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Similar flats in Hornsey with a long lease were in the region of £254,200. The mid-range ground rent payable was £60 billed monthly. The lease expired on 1 October 2077. Considering the 51 years unexpired we approximated the premium to the freeholder to extend the lease to be within £43,700 and £50,600 plus fees.
An example of a Freehold Enfranchisement decision for a Hornsey premises 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 was in relation to 3 flats. The unexpired residue of the current lease was 73.27 years.