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Main reasons to commence your Hornsey lease extension

Top reasons for lease extension now:

A Hornsey leasehold property depreciates with the years remaining on the lease.

Hornsey leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Hornsey tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Hornsey you should check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value

Hornsey property with a lease extension has roughly the same value as a freehold

Leasehold properties in Hornsey with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.

Mortgage lenders may decide not to lend on a short lease

Most banks have constrained their lending criteria in recent years and borrowers are finding it increasingly difficult to raise funding or re-mortgage against flats with shorter lease terms, particularly below 75 years as they are regarded as insufficient security.

Lender Requirement
Barclays plc Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).

Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.

Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval:

• Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND
• The value of the property subject to the short remaining term is £500,000 or more AND
• The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing;
Barnsley Building Society 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Coventry Building Society 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.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

What makes us experts in Hornsey lease extensions?

Lease extensions in Hornsey can be a difficult process. We recommend you secure guidance from a conveyancer and surveyor with experience in lease extensions.

We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Hornsey lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Hornsey Lease Extension Case Summaries:

Austin, Hornsey, North London,

Austin was the the leasehold owner of a conversion flat in Hornsey on the market with a lease of fraction over 61 years left. Austin informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Austin to invoke his statutory right. Austin procured expert legal guidance and was able to make an informed decision and handle with the matter and sell the flat.

Hornsey case:

Mrs Harriet Hernández was assigned a lease of a one bedroom flat in Hornsey in January 2012. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Identical flats in Hornsey with a long lease were valued around £193,400. The mid-range ground rent payable was £65 collected quarterly. The lease concluded on 5 June 2081. Given that there were 59 years remaining we estimated the premium to the landlord to extend the lease to be within £21,900 and £25,200 plus costs.

Decision in Haringey

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.