The re-sale value of a leasehold property in Primrose Hill is impacted by how long the lease has left to run. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is ideal to start the lease extension process when a lease still has 82 years remaining so that all matters can be concluded in advance of the 80 year threshold. Current legislation entitles Primrose Hill qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Primrose Hill with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you enhanced control over the value of your Primrose Hill leasehold, as your property will be more valuable and marketable in respect of lease length should you want 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.
Last year Dylan, started to get near to the 80-year mark with the lease on his two bedroom apartment in Primrose Hill. In buying his home two decades ago, the length of the lease was of minimal bearing. Luckily, he realised he needed to take action soon on a lease extension. Dylan arranged for a lease extension just ahead of time last June. Dylan and the landlord who owned the flat above subsequently agreed on sum of £5,000 . If he not met the deadline, the sum would have escalated by a minimum £950.
In 2009 we were called by Dr A Rodríguez who, having completed a one bedroom apartment in Primrose Hill in August 2005. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Comparative homes in Primrose Hill with a long lease were in the region of £280,000. The average ground rent payable was £45 collected quarterly. The lease came to a finish in 2095. Given that there were 70 years unexpired we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus expenses.
An example of a Lease Extension case for a Primrose Hill property 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 was in relation to 1 flat. The unexpired term was 64.77 years.