When it comes to residential leasehold property in Highbury, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater especially when there are fewer than eighty years remaining. Leasehold owners in Highbury with a lease approaching 81 years left should seriously think of extending it sooner as opposed to later. Once a lease has under 80 years left, under the current legislation the landlord is entitled to calculate and charge a greater amount, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold premises in Highbury with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The lawyers that we work with undertake Highbury lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last October Noah, came critically near to the eighty-year mark with the lease on his leasehold apartment in Highbury. Having bought his home two decades ago, the unexpired term was of minimal relevance. Fortunately, it dawned on him that he would imminently be paying an inflated amount for Extending the lease. Noah arranged for a lease extension just under the wire last May. Noah and the landlord who owned the flat above in the end settled on an amount of £5,500 . If the lease had gone lower than eighty years, the price would have increased by a minimum £900.
Mr and Mrs. E Moore owned a basement apartment in Highbury in January 1997. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Similar residencies in Highbury with a long lease were valued around £245,000. The mid-range amount of ground rent was £50 collected quarterly. The lease ended in 2093. Having 68 years left we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Highbury property is Lower Flat 16A Beatty Road in September 2012. The premium payable was £13,577. The terms of the lease has been agreed between the Applicants and the First Respondent and the Tribunal did not seek to disturb that agreement. This case related to 1 flat.