Islington leases on domestic properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for a lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher amount will be due. Flat owners in Islington will mostly qualify for a lease extension; however It would be wise to check with a conveyancer to check your eligibility. In some cases you may not qualify. There are prescribed timetables and steps to comply with once the process is initiated so it’s wise to be guided by a conveyancing solicitor during the process.
Leasehold properties in Islington with more than 100 years unexpired 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Islington,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Islington valuers.
Last Spring James, came critically close to the eighty-year mark with the lease on his first floor flat in Islington. Having bought his home twenty years previously, the length of the lease was of no significance. by good luck, he became aware that he would imminently be paying an escalated premium for a lease extension. James was able to extend his lease just under the wire in September. James and the freeholder via the managing agents ultimately settled on sum of £5,000 . If the lease had fallen lower than 80 years, the premium would have gone up by at least £850.
Mr Callum Clark took over the lease of a purpose-built apartment in Islington in March 1997. The question was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical residencies in Islington with a long lease were worth £200,000. The mid-range ground rent payable was £50 collected quarterly. The lease ran out on 6 January 2102. Taking into account 77 years left we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including fees.
An example of a Lease Extension case for a Islington residence 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 affected 1 flat. The unexpired term as at the valuation date was 80.5 years.