The re-sale value of a leasehold property in Palmers Green is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for a lease extension before buying. Ideally one should start the process of extending the lease is when the lease still has 82 years unexpired so that formalities can be finalised well before the 80 year threshold. Leasehold Reform legislation entitles Palmers Green qualifying lessees to an additional term of 90 years on top of the unexpired term, at a peppercorn rent (no ground rent). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced 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 wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful correspondence with the freeholder of her studio flat in Palmers Green, Niamh commenced the lease extension process just as her lease was coming close to the all-important 80-year deadline. The transaction was finalised in June 2010. The landlord’s costs were negotiated to under 700 GBP.
In 2013 we were phoned by Dr Ethan Wilson who, having bought a studio apartment in Palmers Green in February 1997. The question was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparative flats in Palmers Green with a long lease were in the region of £290,000. The mid-range amount of ground rent was £45 collected every twelve months. The lease came to a finish in 2099. Taking into account 73 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
An example of a Lease Extension matter before the tribunal for a Palmers Green residence 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 remaining number of years on the lease was 81.79 years.