The value of Seven Sisters leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the remaining term is less than 80 years
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in Seven Sisters,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Seven Sisters valuers.
Trailing protracted negotiations with the freeholder of her two bedroom flat in Seven Sisters, Mollie initiated the lease extension process just as the lease was nearing the all-important 80-year deadline. The transaction was finalised in November 2007. The landlord’s costs were kept to an absolute minimum.
Last Christmas we were phoned by Mr and Mrs. D Thompson , who moved into a newly refurbished apartment in Seven Sisters in May 2004. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable flats in Seven Sisters with 100 year plus lease were in the region of £171,800. The mid-range ground rent payable was £55 invoiced every twelve months. The lease expired on 1 March 2075. Having 50 years left we calculated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 exclusive of costs.
An example of a Freehold Enfranchisement decision for a Seven Sisters premises is 22 Wakefield Road in January 2012. Following a vesting order Clerkenwell and Shoreditch County Court under section 26 of the Leasehold Reform,Housing and Urban Development Act 1993 on 9th May 2011 the Tribunal decided that the price that the Applicant for the freehold interest should pay is £17,400 This case was in relation to 2 flats. The unexpired residue of the current lease was 74.13 years.