Why you should commence your Palmers Green lease extension
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<h3> Top reasons for lease extension now:
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Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/palmers-green">Palmers Green</a> property value </h4>
<p> The re-sale value of a leasehold property in Palmers Green is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be addressed well before the eighty year mark. Statute entitles Palmers Green qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension. <h4>Palmers Green property with a lease extension is almost the same value as a freehold</h4>
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Leasehold properties in Palmers Green with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it. <h4>Lenders may not issue a mortgage with a short lease</h4> Banks and building societies are tightening their criteria and many now want flats to have at least 60 if not 70 years left once the mortgage has expired. As a number of flats in Palmers Green were created in the 1950s, 1960s and 1970s this means many now need to be extended if they if they are to be mortgageable.
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<td>Birmingham Midshires</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Godiva Mortgages</td>
<td> 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.
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<td>Nationwide Building Society</td>
<td> - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years. <br />- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).<br /><br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br />- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years. <br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 55 years<br />- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period is less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 55 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (Will be declined)<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house<br />- A lease subject to a peppercorn Ground Rent (Annual Rent) charges<br /><br />For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance. <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?<br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years.<br /><br />Lease Extensions<br /><br />We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office. <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>Santander</td>
<td> You must report the unexpired lease term to us and await our instructions if: <br />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<br />2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or<br />3. no valuation report is provided<br />However, we will not accept a lease where on expiry of the mortgage:<br />(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or<br />(ii) less than 30 years remain and the loan is repaid on a capital and interest basis<br /><br />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.
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<td>Royal Bank of Scotland</td>
<td> Mortgage term plus 30 years.
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<h4> Get in touch with one of our Palmers Green lease extension solicitors or enfranchisement solicitors
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The lawyers that we work with procure Palmers Green 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 lawyer we work with provide it.
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Palmers Green Lease Extension Case Studies:
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<h5> Jamie, Palmers Green, North London,</h5>
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Jamie owned a 2 bedroom flat in Palmers Green being sold with a lease of a little over 72 years unexpired. Jamie on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jamie to exercise his statutory right. Jamie procured expert advice and secured an acceptable deal informally and sell the property.
<h5>Palmers Green case:</h5>
<p> Mr and Mrs. A King purchased a studio flat in Palmers Green in January 2011. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar properties in Palmers Green with an extended lease were worth £210,000. The average amount of ground rent was £50 billed every twelve months. The lease ran out in 2106. Given that there were 80 years remaining we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.
<div> <h5>Decision in Haringey</h5>
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An example of a Lease Extension matter before the tribunal for a Palmers Green premises is
First Floor Flat 109 Lyndhurst Road in May 2010. Following a vesting order by Edmonton County Court on 29th October 2009 the Tribunal decided on a figure of £5,012 for a lease extension.
This case affected 1 flat. The unexpired term as at the valuation date was 81.79 years.
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