With a residential leasehold premises in Southgate, you are actually purchasing a right to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive particularly when there are fewer than eighty years left. Leasehold owners in Southgate with a lease approaching 81 years left should seriously consider extending it without delay. When a lease has below 80 years left, under the relevant legislation the landlord can calculate and charge a greater amount, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold premises in Southgate with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better 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 conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Eliot, started to get near to the eighty-year mark with the lease on his basement apartment in Southgate. In buying his property 18 years previously, the unexpired term was of no importance. As luck would have it, he realised he needed to take action soon on Extending the lease. Eliot extended the lease at the eleventh hour last July. Eliot and the landlord eventually agreed on the final figure of £5,500 . If he failed to meet the deadline, the price would have increased by at least £1,025.
Last June we were phoned by Dr Rory Peterson , who purchased a garden apartment in Southgate in September 2010. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Comparative flats in Southgate with a long lease were worth £300,000. The mid-range ground rent payable was £50 billed monthly. The lease expiry date was on 2 November 2100. Taking into account 75 years remaining we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Southgate residence is 23 Beaconsfield Road in July 2013. The Tribunals decided that the amount payable was £31,203 for the freehold. This case was in relation to 2 flats. The unexpired term as at the valuation date was 70.31 years.