Islington leases on domestic deteriorating in value. if your lease has about 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease falls below this level then you begin incurring an additional element called marriage value. Flat owners in Islington will mostly qualify for a lease extension; however It would be wise to check with a lawyer to confirm your eligibility. In certain cases you may not be entitled. There are prescribed deadlines and steps to follow once the process is initiated so it’s prudent to be guided by a conveyancer during the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Chelsea 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Islington,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Islington valuers.
Half a year ago Aiden, started to get close to the eighty-year threshold with the lease on his garden apartment in Islington. Having purchased his property 18 years previously, the unexpired term was of little bearing. by good luck, he became aware that he would imminently be paying an escalated premium for a lease extension. Aiden arranged for a lease extension just ahead of time in April. Aiden and the landlord eventually agreed on an amount of £5,500 . If he failed to meet the deadline, the sum would have gone up by a minimum £900.
In 2011 we were contacted by Dr B Brooks who, having acquired a purpose-built flat in Islington in June 2000. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Islington with a long lease were valued around £223,400. The average amount of ground rent was £60 collected yearly. The lease came to a finish on 3 August 2084. Given that there were 59 years unexpired we calculated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 exclusive of fees.
An example of a Lease Extension case for a Islington property is 5C Stoke Newington Road in April 2010. the Tribunal therefore concludes that the premium to be paid for the extended lease is £700.00 This case was in relation to 1 flat. The unexpired term was 80.5 years.