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Top reasons for Muswell Hill lease extension

Top reasons for lease extension now:

Increase your lease and increase your Muswell Hill property value

The market value of Muswell Hill leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate significantly once the unexpired lease term is less than eighty years

Muswell Hill property with a lease extension has roughly the same value as a freehold

Leasehold residencies in Muswell Hill with over one hundred years outstanding 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 buying the reversionary interest unless savings on ground rent and estate charges warrant it.

Lending institutions may not lend on a short lease

Most banks have tightened lending criteria in the last ten years and borrowers are encountering difficulties in arranging funding or re-mortgage against property with shorter lease terms, particularly under 75 years as they are deemed to be unacceptable security.

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;
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.
Yorkshire 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.

Why use us for your lease extension in Muswell Hill?

The conveyancers that we work with undertake Muswell Hill 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.

Muswell Hill Lease Extension Case Summaries:

Finn, Muswell Hill, North London

In recent months Finn, came very near to the 80-year mark with the lease on his garden apartment in Muswell Hill. In buying his property two decades ago, the unexpired term was of minimal relevance. Fortunately, he recognised he needed to take steps soon on Extending the lease. Finn extended the lease just in the nick of time last August. Finn and the landlord who owned the flat above in the end settled on a premium of £6,000 . If he not met the deadline, the premium would have escalated by a minimum £975.

Muswell Hill case:

Mr and Mrs. L Campbell was assigned a lease of a garden apartment in Muswell Hill in August 2000. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative premises in Muswell Hill with an extended lease were in the region of £225,400. The average amount of ground rent was £45 collected quarterly. The lease finished on 21 January 2088. Considering the 64 years unexpired we estimated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of expenses.

Decision in Haringey

An example of a Lease Extension matter before the tribunal for a Muswell Hill flat is Flat B 10 Grove Avenue in October 2013. Following a vesting order Clerkenwell and Shoreditch County Court 3rd July 2013 The tribunal determines that the premium payable for the lease extension was £36,215.00 This case related to 1 flat. The unexpired lease term was 65.21 years.