With a long leasehold property in North London, you are actually purchasing a right to live in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially when there are less than eighty years left. Anyone in North London with a lease approaching 81 years left should seriously think of extending it as soon as possible. Once a lease has under 80 years left, under the relevant statute the landlord can calculate and demand a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold residencies in North London with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| 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 |
Lease extensions in North London can be a difficult process. We recommend you secure professional help from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring North London lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Jake owned a high value flat in North London on the market with a lease of just over fifty eight years outstanding. Jake informally spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Jake to invoke his statutory right. Jake procured expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last Autumn we were approach by Mrs Y Brooks , who moved into a ground floor flat in North London in August 2001. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in North London with a long lease were in the region of £233,200. The average amount of ground rent was £60 invoiced monthly. The lease finished in 2087. Having 61 years outstanding we estimated the premium to the landlord to extend the lease to be within £22,800 and £26,400 not including fees.
An example of a Freehold Enfranchisement case 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 number of years remaining on the existing lease(s) was 73.26 years.