Unfortunately that a North Finchley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the North Finchley property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than 80 years - otherwise a higher premium will be payable. Most flat owners in North Finchley will be able to extend under the legislation; however a conveyancer will 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 lawyer from beginning to end of the formalities.
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you enhanced control over the value of your North Finchley leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Harvey owned a studio flat in North Finchley on the market with a lease of a few days over 61 years left. Harvey informally approached his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harvey to exercise his statutory right. Harvey obtained expert advice and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
In 2011 we were e-mailed by Mrs Lily Mason who, having purchased a newly refurbished apartment in North Finchley in January 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Identical residencies in North Finchley with 100 year plus lease were valued about £210,000. The average amount of ground rent was £50 invoiced yearly. The lease expired in 2106. Having 80 years outstanding we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
An example of a Lease Extension case for a North Finchley flat is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case was in relation to 1 flat. The unexpired term as at the valuation date was 76 years.