Unfortunately that a Northwood residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Northwood property market.Once your lease gets to 85ish years, you should start considering a lease extension. If lease term falls below 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Northwood will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
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 conveyancer we work with provide it.
Two years ago Finn, came very close to the eighty-year mark with the lease on his one bedroom apartment in Northwood. Having purchased his flat two decades ago, the length of the lease was of no interest. Thankfully, he recognised he needed to take steps soon on Extending the lease. Finn arranged for a lease extension just under the wire in April. Finn and the freeholder in the end settled on a premium of £5,000 . If the lease had dipped to less than 80 years, the price would have gone up by a minimum £950.
Mr and Mrs. W Roberts was assigned a lease of a ground floor flat in Northwood in September 2012. We are asked if we could approximate the price would be to prolong the lease by 90 years. Identical premises in Northwood with 100 year plus lease were worth £275,000. The mid-range amount of ground rent was £45 billed annually. The lease lapsed on 5 May 2094. Given that there were 69 years unexpired we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.
An example of a Lease Extension matter before the tribunal 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 affected 3 flats. The number of years remaining on the existing lease(s) was 71 years.