The re-sale value of a leasehold property in Palmers Green depends on how long the lease has remaining. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to start the lease extension process when a lease still has 82 years to run so that formalities can be addressed in advance of the 80 year mark. Statute enables Palmers Green qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Palmers Green with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
Retaining our service gives you enhanced control over the value of your Palmers Green leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Caleb, came very close to the 80-year threshold with the lease on his studio flat in Palmers Green. Having bought his home 19 years previously, the unexpired term was of no importance. by good luck, he realised he would imminently be paying an escalated premium for Extending the lease. Caleb extended the lease at the eleventh hour last July. Caleb and the freeholder eventually agreed on an amount of £6,000 . If he had missed the deadline, the amount would have escalated by a minimum £1,025.
In 2012 we were phoned by Dr Ryan Hill who, having bought a newly refurbished flat in Palmers Green in March 2002. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Comparable properties in Palmers Green with a long lease were valued about £179,200. The average amount of ground rent was £55 invoiced every twelve months. The lease finished in 2077. Taking into account 51 years left we approximated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of fees.
An example of a Lease Extension decision 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 number of years remaining on the existing lease(s) was 81.79 years.