Tufnell Park residential property owned on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
Leasehold residencies in Tufnell Park with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Godiva Mortgages | 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. |
| 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. |
Retaining our service gives you increased control over the value of your Tufnell Park leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months James, started to get close to the 80-year mark with the lease on his leasehold flat in Tufnell Park. In buying his home two decades ago, the unexpired term was of minimal relevance. Fortunately, he realised he needed to take steps soon on Extending the lease. James was able to extend his lease just under the wire in May. James and the freeholder via the managing agents in the end settled on a premium of £5,500 . If the lease had fallen lower than eighty years, the figure would have escalated by a minimum £1,075.
In 2011 we were contacted by Mr and Mrs. A Jones who, having acquired a garden flat in Tufnell Park in May 2005. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Comparable flats in Tufnell Park with a long lease were in the region of £242,600. The mid-range amount of ground rent was £45 billed per annum. The lease concluded on 8 May 2093. Considering the 67 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 not including legals.
An example of a Lease Extension decision for a Tufnell Park residence is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case affected 1 flat. The number of years remaining on the existing lease(s) was 64.77 years.