Unfortunately that a Hornsey residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Hornsey property prices.Once your lease gets to 85ish years, 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 slips lower than eighty years - otherwise a higher amount will be payable. The majority of flat owners in Hornsey will be able to extend under the legislation; however a lawyer 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 be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Hornsey leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Eliot owned a high value flat in Hornsey being sold with a lease of a few days over sixty years outstanding. Eliot informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Eliot to invoke his statutory right. Eliot obtained expert advice and secured an acceptable resolution without going to tribunal and readily saleable.
In 2012 we were called by Mrs L Davies who, having moved into a first floor flat in Hornsey in July 2006. The question was if we could shed any light on how much (roughly) price would be for a 90 year extension to my lease. Similar homes in Hornsey with a long lease were worth £166,400. The average ground rent payable was £60 collected every twelve months. The lease ended on 15 May 2080. Having 54 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 not including costs.
An example of a Freehold Enfranchisement case for a Hornsey flat 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 remaining number of years on the lease was 73.27 years.