Primrose Hill leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Primrose Hill tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Primrose Hill you should investigate if your lease has between seventy and ninety years left. There are good reasons why a Primrose Hill leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Regardless of whether you are a tenant or a freeholder in Primrose Hill,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Primrose Hill valuers.
Muhammad was the the leasehold proprietor of a studio flat in Primrose Hill being marketed with a lease of fraction over sixty years remaining. Muhammad on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Muhammad to exercise his statutory right. Muhammad procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2014 we were contacted by Dr O Ricardo who, having was assigned a lease of a ground floor apartment in Primrose Hill in April 2009. The question was if we could estimate the price would be for a 90 year lease extension. Identical properties in Primrose Hill with an extended lease were valued around £267,600. The mid-range ground rent payable was £65 billed per annum. The lease ran out in 2093. Having 67 years left we approximated the premium to the freeholder to extend the lease to be between £14,300 and £16,400 exclusive of expenses.
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 was in relation to 1 flat. The number of years remaining on the existing lease(s) was 64.77 years.