Unfortunately that a Southgate residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Southgate property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Southgate will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the process.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with undertake 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.
During the course of the last few months Gabriel, started to get near to the 80-year threshold with the lease on his ground floor apartment in Southgate. Having bought his property two decades ago, the lease term was of little importance. Fortunately, he became aware that he would soon be paying way over the odds for a lease extension. Gabriel was able to extend his lease at the eleventh hour last September. Gabriel and the freeholder eventually agreed on a premium of £5,500 . If he not met the deadline, the figure would have escalated by a minimum £900.
In 2012 we were called by Dr Hannah Clark who, having owned a purpose-built apartment in Southgate in July 2007. The question was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Similar residencies in Southgate with 100 year plus lease were valued about £267,600. The average amount of ground rent was £65 collected per annum. The lease expired in 2093. Considering the 67 years left we approximated the compensation to the freeholder for the lease extension to be within £14,300 and £16,400 exclusive of fees.
An example of a Freehold Enfranchisement decision 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 lease term was 70.31 years.