The re-sale value of a leasehold property in Northolt is impacted by how long the lease has left to run. If it is close to or less than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that all matters can be concluded in advance of the 80 year cut off point. Leasehold Reform legislation enables Northolt qualifying lessees to obtain a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property 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 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. |
| 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. |
The conveyancing solicitors that we work with handle Northolt 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 conveyancer we work with provide it.
Off the back of unsuccessful negotiations with the landlord of her one bedroom flat in Northolt, Rhiannon initiated the lease extension process just as the lease was nearing the crucial eighty-year threshold. The lease extension completed in May 2012. The freeholder’s charges were kept to an absolute minimum.
Mr and Mrs. N Martin bought a first floor apartment in Northolt in November 2004. The question was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar properties in Northolt with a long lease were in the region of £225,400. The mid-range amount of ground rent was £45 collected per annum. The lease expiry date was in 2090. Given that there were 64 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 plus legals.
An example of a Lease Extension case for a Northolt flat is GFF 1 Holyrood Avenue in May 2014. The Tenant wished to acquire a new (extended) lease and applied to the Willesden County Court who granted a vesting order on 20* March2013. The Tribunal decied that the premium to be paid was £9,062 This case affected 1 flat. The remaining number of years on the lease was 79 years.