When it comes to domestic leasehold property in North London, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater notably when there are fewer than 80 years remaining. Residents in North London with a lease nearing 81 years unexpired should seriously consider extending it as soon as possible. When a lease has under eighty years left, under the relevant Act the landlord is entitled to calculate and levy a larger amount, based on a technical computation, strangely termed as “marriage value” which is due.
Leasehold residencies in North London with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | 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 30 years plus the term of the mortgage at the outset of the mortgage. |
Regardless of whether you are a tenant or a landlord in North London,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with North London valuers.
In the wake of eight months of unsuccessful discussions with the landlord of her two bedroom apartment in North London, Maisie started the lease extension process as the eighty year deadline was fast approaching. The lease extension completed in October 2015. The freeholder’s charges were restricted to below 600 pounds.
Last month we were e-mailed by Mr and Mrs. M Rivera , who bought a first floor apartment in North London in January 2004. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by a further 90 years. Comparative properties in North London with 100 year plus lease were worth £235,600. The average ground rent payable was £60 collected yearly. The lease lapsed on 9 June 2088. Given that there were 62 years remaining we calculated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 not including expenses.
An example of a Freehold Enfranchisement case for a North London residence is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case related to 1 flat. The number of years remaining on the existing lease(s) was 73.26 years.