When it comes to long leasehold property in Primrose Hill, you effectively rent it for a certain amount of time. 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 consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly especially once there are fewer than eighty years remaining. Anyone in Primrose Hill with a lease drawing near to 81 years remaining should seriously think of extending it as soon as possible. When the lease term has below 80 years left, under the relevant statute the landlord can calculate and levy a greater premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold premises in Primrose Hill with over one hundred 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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; |
| Halifax | Minimum 70 years from the date 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. |
| 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 conveyancing solicitors that we work with procure Primrose Hill 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 conveyancing solicitor we work with provide it.
After protracted negotiations with the freeholder of her one bedroom flat in Primrose Hill, Naomi started the lease extension process just as the lease was approaching the all-important 80-year threshold. The legal work was concluded in August 2009. The landlord’s costs were restricted to slightly above 600 pounds.
Last Christmas we were called by Mr and Mrs. V Turner , who completed a one bedroom apartment in Primrose Hill in June 1996. The question was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Similar homes in Primrose Hill with a long lease were worth £285,000. The average ground rent payable was £45 collected every twelve months. The lease ran out on 7 June 2096. Taking into account 71 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including fees.
An example of a Lease Extension matter before the tribunal for a Primrose Hill residence is Flat 2 27 Mackeson Road in December 2012. The Tribunal assessed the value of the lease extension premium at £35,435 and rounded the figure to £35,500 This case related to 1 flat. The unexpired term was 64.77 years.