Unfortunately that a North End residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the North End property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining falls below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to 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 The majority of leasehold owners in North End will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in North End with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle North End 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 conveyancing solicitor we work with provide it.
In the wake of 6 months of protracted negotiations with the landlord of her leasehold apartment in North End, Danielle initiated the lease extension process as the 80 year mark was swiftly advancing. The transaction completed in May 2008. The freeholder’s costs were negotiated to below four hundred GBP.
Last May we were phoned by Mr and Mrs. P François , who owned a garden apartment in North End in February 2012. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Comparable premises in North End with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £55 collected yearly. The lease ended on 4 February 2106. Taking into account 80 years outstanding we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus costs.
An example of a Lease Extension decision for a North End flat is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case was in relation to 13 flats. The unexpired term was 76 years.