Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Ponders End. Inevitably, the period of lease remaining reduces over time. This may slip by relatively unnoticed when the property has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Qualifying long lease owners in Ponders End have the right to extend the lease for an additional 90 years in accordance with statute. You should give careful attention before delaying your Ponders End lease extension. Putting off that expense now simply increases the price you will eventually incur for a lease extension
Leasehold properties in Ponders End with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
Lease extensions in Ponders End can be a difficult process. We recommend you obtain guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Ponders End lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Joshua owned a high value flat in Ponders End being marketed with a lease of fraction over 72 years remaining. Joshua on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Joshua to exercise his statutory right. Joshua obtained expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
Last Winter we were e-mailed by Dr Victoria Williams , who owned a garden flat in Ponders End in March 2002. We are asked if we could approximate the price would be to extend the lease by 90 years. Identical premises in Ponders End with a long lease were in the region of £205,000. The average amount of ground rent was £50 collected annually. The lease came to a finish on 28 March 2102. Given that there were 78 years remaining we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
An example of a Vesting Order and Purchase of freehold matter before the tribunal for a Ponders End property is Ground Floor Flat 4A Baronet Road in February 2010. Following a vesting order by Edmonton County Court on 23rd December 2008 (case number 8ED064) the Tribunal decided that the price that the Applicant for the freehold interest should pay is £8,689.00 This case affected 2 flats. The unexpired term as at the valuation date was 80.01 years.