The nearer a domestic lease in Southgate nears to zero years unexpired, the more it reduces the value of the property. Where the lease has, over 100 years remaining then this decrease may be fractional nevertheless there will become a point in time when a lease has fewer than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending sooner than later. The majority of flat owners in Southgate will qualify for this right; nevertheless a conveyancing solicitor can confirm if you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold properties in Southgate with over 100 years outstanding on the lease are sometimes 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 purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
The conveyancers that we work with procure Southgate 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 conveyancer we work with provide it.
Last year Caleb, started to get near to the eighty-year mark with the lease on his leasehold flat in Southgate. In buying his home 18 years ago, the unexpired term was of no significance. Luckily, he recognised he needed to take action soon on a lease extension. Caleb arranged for a lease extension at the eleventh hour last May. Caleb and the landlord eventually agreed on sum of £5,500 . If the lease had slid to less than eighty years, the sum would have increased by at least £1,125.
Last year we were approach by Mrs Alicia François , who was assigned a lease of a studio apartment in Southgate in March 1995. The question was if we could approximate the premium could be to prolong the lease by 90 years. Similar residencies in Southgate with an extended lease were worth £210,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease concluded on 20 February 2104. Considering the 79 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including expenses.
An example of a Freehold Enfranchisement decision for a Southgate flat is 23 Beaconsfield Road in July 2013. The Tribunals decided that the amount payable was £31,203 for the freehold. This case affected 2 flats. The unexpired lease term was 70.31 years.