Islington leases on domestic properties are gradually losing value. Where your lease has about ninety years unexpired, you should start thinking about a lease extension. An important point to note is that it is desirable for your lease extension to take place before the term of the current lease falls lower than eighty years - otherwise a higher premium will be payable. Leasehold owners in Islington will usually qualify for a lease extension; however a solicitor should be able check if you qualify. In some situations you may not be entitled. There are also strict timetables and formalities to comply with once the process has started so it’s prudent to be guided by a conveyancer during the process.
Leasehold residencies in Islington with over 100 years remaining 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 home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you increased control over the value of your Islington leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Edward owned a high value flat in Islington being sold with a lease of a little over 59 years left. Edward on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Edward to exercise his statutory right. Edward obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. V Miller , who completed a garden flat in Islington in April 1995. The dilemma was if we could approximate the price would likely be to prolong the lease by ninety years. Identical homes in Islington with an extended lease were valued about £300,000. The mid-range ground rent payable was £50 invoiced per annum. The lease finished in 2101. Having 75 years remaining we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of legals.
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 was 80.5 years.