When it comes to residential leasehold premises in North London, you are actually purchasing a right to live in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than 80 years left. Anyone in North London with a lease nearing 81 years unexpired should seriously consider extending it sooner rather than later. Once a lease has less than 80 years remaining, under the current legislation the freeholder is entitled to calculate and levy a greater amount, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold premises in North London with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in North London,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with North London valuers.
Blake owned a 2 bedroom apartment in North London being marketed with a lease of a little over 61 years left. Blake on an informal basis contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Blake to invoke his statutory right. Blake obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2012 we were called by Mr and Mrs. F Nguyen who, having bought a basement apartment in North London in July 2002. The question was if we could approximate the premium would likely be for a 90 year lease extension. Comparable properties in North London with an extended lease were valued about £260,200. The mid-range amount of ground rent was £65 invoiced quarterly. The lease lapsed in 2092. Taking into account 66 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal 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 unexpired lease term was 73.26 years.