Unfortunately that a Highgate residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Highgate property prices.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Highgate will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold properties in Highgate with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Highgate,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Highgate valuers.
In 2014 Freddie, started to get near to the 80-year mark with the lease on his ground floor flat in Highgate. In buying his property 18 years ago, the lease term was of no interest. by good luck, he recognised he would imminently be paying an inflated amount for a lease extension. Freddie arranged for a lease extension just in the nick of time in January. Freddie and the landlord ultimately agreed on an amount of £5,500 . If the lease had dipped to less than eighty years, the sum would have escalated by at least £1,125.
Last Winter we were contacted by Mrs J François , who was assigned a lease of a one bedroom flat in Highgate in May 1999. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical flats in Highgate with 100 year plus lease were valued about £260,000. The average amount of ground rent was £50 billed quarterly. The lease came to a finish in 2097. Given that there were 72 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.
An example of a Lease Extension case for a Highgate property is Flat 2A 19 Shepherds Hill in June 2014. The tribunal concluded in accordance with section 48 and schedule 13 of the Leasehold Reform,Housing and Urban Development Act (the 1993 Act) that the premium payable in respect of the grant of a new lease for the Flat be £24,303 (twenty four thousand three hundred and three pounds) This case affected 1 flat. The unexpired lease term was 67.85 years.