Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Islington. Clearly, the term of lease left reduces as time goes by. This may slip by relatively unnoticed when the property needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Qualifying long lease owners in Islington have the right to extend the lease for an additional ninety years in accordance with statute. Please give careful consideration before putting off your Islington lease extension. Putting off that expense now only increases the price you will eventually incur for a lease extension
Leasehold properties in Islington with more than 100 years left on the lease are sometimes referred to as ‘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 buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Islington can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer 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 a wealth of experience procuring Islington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Sam owned a 2 bedroom flat in Islington on the market with a lease of a little over 59 years left. Sam informally approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 annually. No ground rent would be payable on a lease extension were Sam to exercise his statutory right. Sam obtained expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr and Mrs. P Ramírez purchased a basement apartment in Islington in June 2011. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparable homes in Islington with 100 year plus lease were valued about £205,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease lapsed on 19 September 2105. Taking into account 79 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 not including costs.
An example of a Lease Extension matter before the tribunal 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 was in relation to 1 flat. The unexpired term as at the valuation date was 80.5 years.