The market value of Brent Cross leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the unexpired lease term is below than eighty years
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before 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. |
Engaging our service will provide you increased control over the value of your Brent Cross leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Elijah was the the leasehold proprietor of a studio flat in Brent Cross being sold with a lease of fraction over fifty eight years unexpired. Elijah informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Elijah to exercise his statutory right. Elijah obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Mr and Mrs. U Mason acquired a basement apartment in Brent Cross in February 1995. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable flats in Brent Cross with a long lease were worth £205,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease concluded in 2105. Considering the 79 years outstanding we calculated the premium to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Brent Cross property is First Floor Flat 61 Wilberforce Road in March 2014. The premium payable was £10,130 and the case was remitted back to the Willesden County Court to effect the Vesting Order (Claim No 3W103100). This case affected 1 flat. The unexpired term was 71 years.