For anyone whose Palmers Green home is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
Leasehold properties in Palmers Green with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Retaining our service gives you better control over the value of your Palmers Green leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year David, came precariously close to the eighty-year threshold with the lease on his two bedroom apartment in Palmers Green. Having purchased his flat 19 years previously, the length of the lease was of no bearing. Fortunately, he realised he needed to take steps soon on Extending the lease. David arranged for a lease extension just ahead of time in January. David and the landlord in the end settled on sum of £5,500 . If the lease had slipped below eighty years, the figure would have become more costly by at least £975.
Last Summer we were called by Dr Logan Sharif , who purchased a newly refurbished flat in Palmers Green in March 1999. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Comparable properties in Palmers Green with a long lease were worth £216,000. The average amount of ground rent was £60 collected annually. The lease lapsed on 5 October 2084. Given that there were 58 years unexpired we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus fees.
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 was in relation to 1 flat. The unexpired lease term was 81.79 years.