Northwood leases on domestic properties are gradually losing value. Where your lease has about ninety years left, you should start thinking about a lease extension. If lease term is under eighty years, you will then have 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 additional value that a lease extension will add to the property. Leasehold owners in Northwood will usually be legally entitled to a lease extension; however a solicitor will check your eligibility. In some situations you may not be entitled. There are also strict timetables and formalities to follow once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold properties in Northwood with more than 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Northwood 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 conveyancing solicitor we work with provide it.
Luke was the the leasehold owner of a high value apartment in Northwood on the market with a lease of fraction over 72 years unexpired. Luke informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Luke to exercise his statutory right. Luke obtained expert advice and was able to make an informed judgement and deal with the matter and sell the property.
Dr J Roberts bought a garden flat in Northwood in April 2009. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparative premises in Northwood with 100 year plus lease were in the region of £198,800. The mid-range amount of ground rent was £55 invoiced per annum. The lease ran out on 13 March 2077. Having 55 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 exclusive of professional charges.
An example of a Lease Extension case for a Northwood flat is Flats 8, 11 and 15 Craigmore Court 46 Murray Road in December 2013. The tribunal held that the price payable by the Applicant tenant of Flat 8 to acquire an extended lease shall be £26,438 plus £1 to the intermediate lessee . The tribunal held that the price payable by the Applicant tenants of Flat 11 to acquire an extended lease shall be £26,791 plus £1 to the intermediate lessee. The tribunal held that the price payable by the Applicant tenant of Flat 15 to acquire an extended lease shall be £26,638 plus £1 to the intermediate lessee . This case affected 3 flats. The number of years remaining on the existing lease(s) was 71 years.