With a domestic leasehold premises in Southgate, you effectively rent it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially when there are fewer than eighty years remaining. Residents in Southgate with a lease drawing near to 81 years left should seriously consider extending it without delay. When a lease has below eighty years outstanding, under the relevant statute the freeholder is entitled to calculate and levy a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold premises in Southgate with over 100 years outstanding 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 premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Engaging our service gives you increased control over the value of your Southgate leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Austin, started to get near to the eighty-year threshold with the lease on his garden apartment in Southgate. Having purchased his property 18 years ago, the length of the lease was of minimal significance. As luck would have it, it dawned on him that he needed to take steps soon on Extending the lease. Austin was able to extend his lease just under the wire last May. Austin and the freeholder eventually agreed on an amount of £6,000 . If he had missed the deadline, the price would have escalated by at least £1,025.
Mr and Mrs. L Díaz bought a ground floor flat in Southgate in May 1999. The question was if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Comparable flats in Southgate with 100 year plus lease were valued about £230,800. The average ground rent payable was £60 collected yearly. The lease elapsed on 10 March 2086. Given that there were 60 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £24,700 and £28,600 not including costs.
An example of a Freehold Enfranchisement case for a Southgate property 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.