It’s an underpublicised certainty that a London Colney residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the London Colney property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in London Colney will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold premises in London Colney with more than 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 premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date 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. |
The lawyers that we work with undertake London Colney lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Trailing protracted negotiations with the landlord of her leasehold flat in London Colney, Isabella started the lease extension process as the eighty year mark was rapidly approaching. The legal work was concluded in July 2005. The landlord’s charges were negotiated to slightly above 650 pounds.
In 2011 we were phoned by Mrs T Bennett who, having moved into a one bedroom apartment in London Colney in February 2012. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical flats in London Colney with 100 year plus lease were in the region of £256,600. The average amount of ground rent was £60 billed annually. The lease ran out in 2077. Considering the 52 years left we calculated the premium to the freeholder to extend the lease to be within £41,800 and £48,400 plus legals.
Mr U Moreau acquired a studio flat in London Colney in February 2006. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical flats in London Colney with a long lease were worth £218,000. The mid-range ground rent payable was £45 invoiced per annum. The lease ended in 2088. Taking into account 63 years unexpired we estimated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 plus legals.