Top reasons for Southgate lease extension
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Why you should start your Southgate lease extension today: </h3>
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Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/southgate">Southgate</a> property value </h4>
<p> The market value of a leasehold property in Southgate is impacted by how many years the lease has remaining. If it is near to or fewer than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to start the lease extension process when a lease still has 82 years to run so that a lease extension can be concluded prior to the 80 year cut off point. Leasehold Reform legislation enables Southgate qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension. <h4>An extended lease has roughly the same value as a freehold</h4>
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Leasehold properties in Southgate with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it. <h4>Lenders may decide not to lend with a short lease</h4> Whether or not the lease is be regarded as a short lease depends on the specific mortgage company, yet banks and building societies start to get jittery at around 75 years. This may be problematic as and when you wish to sell or remortgage your flat as it will be effectively unmortgageable. Even though you may have no immediate desire to sell but when you do your buyer must wait two years before being able to commence the legal procedures for a lease extension.
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<td>Accord Mortgages</td>
<td> 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.
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<td>Birmingham Midshires</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Coventry Building Society</td>
<td> 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.
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<td>Godiva Mortgages</td>
<td> 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.
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<h4> Get in touch with one of our Southgate lease extension solicitors or enfranchisement solicitors
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<p> Using our service gives you increased control over the value of your Southgate leasehold, as your property will be more valuable and saleable in respect of lease length should you wish 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. <h4>
Southgate Lease Extension Case Summaries:
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<h5> Olivia, Southgate, North London,</h5>
<p> Subsequent to lengthy negotiations with the landlord of her one bedroom apartment in Southgate, Olivia commenced the lease extension process just as the lease was approaching the all-important eighty-year mark. The lease extension was finalised in May 2012. The landlord’s costs were negotiated to below 550 pounds.
<h5>Southgate case:</h5>
<p> Mr and Mrs. C Scott took over the lease of a purpose-built flat in Southgate in March 1999. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparable residencies in Southgate with an extended lease were valued about £206,200. The average ground rent payable was £60 collected yearly. The lease expired in 2082. Having 56 years left we calculated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 exclusive of professional charges.
<div> <h5>Decision in Barnet</h5>
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An example of a Freehold Enfranchisement matter before the tribunal 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 was in relation to 2 flats. The remaining number of years on the lease was 70.31 years.
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