Northwood leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Northwood residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Northwood you would be well advised to investigate if your lease has between seventy and 90 years left. There are good reasons why a Northwood flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is effected without delay
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Northwood,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Northwood valuers.
In 2014 Alex, started to get near to the 80-year threshold with the lease on his ground floor flat in Northwood. Having bought his flat two decades ago, the unexpired term was of no bearing. Luckily, he realised he needed to take action soon on Extending the lease. Alex was able to extend his lease at the eleventh hour in April. Alex and the freeholder eventually agreed on sum of £6,000 . If he failed to meet the deadline, the amount would have increased by at least £1,125.
Last Autumn we were approach by Mr T Norbert , who acquired a purpose-built flat in Northwood in February 2010. The question was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Comparative homes in Northwood with a long lease were worth £280,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease expiry date was in 2096. Taking into account 70 years remaining we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including costs.
An example of a Lease Extension case for a Northwood property 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 related to 3 flats. The unexpired lease term was 71 years.