North London leases on domestic deteriorating in value. if your lease has in the region of 90 years unexpired, you should start considering the need for a lease extension. If lease term is under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in North London will usually be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain cases you may not qualify. There are also strict timetables and formalities to follow once the process is initiated so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in North London,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with North London valuers.
Half a year ago Andrew, started to get near to the eighty-year mark with the lease on his leasehold flat in North London. In buying his home two decades ago, the lease term was of no importance. Luckily, he noticed he needed to take action soon on a lease extension. Andrew was able to extend his lease just ahead of time last January. Andrew and the freeholder via the management company in the end agreed on sum of £6,000 . If the lease had descended lower than 80 years, the premium would have escalated by at least £950.
Last Winter we were called by Mr and Mrs. F Scott , who moved into a ground floor flat in North London in May 2003. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Comparative properties in North London with 100 year plus lease were in the region of £205,000. The mid-range amount of ground rent was £50 billed per annum. The lease expiry date was in 2104. Given that there were 79 years unexpired we estimated the compensation to the landlord for the lease extension to be within £7,600 and £8,800 exclusive of legals.
An example of a Freehold Enfranchisement matter before the tribunal for a North London property 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 affected 1 flat. The unexpired term as at the valuation date was 73.26 years.