It’s an underpublicised truth that a Southgate residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Southgate property market.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than eighty years - otherwise a higher premium will be due. The majority of flat owners in Southgate will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence 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. |
| Halifax | 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. |
| 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. |
| 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 |
Engaging our service will provide you enhanced control over the value of your Southgate leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Finley was the the leasehold owner of a studio apartment in Southgate on the market with a lease of a little over 61 years outstanding. Finley on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Finley to exercise his statutory right. Finley procured expert legal guidance and was able to make a more informed decision and handle with the matter and sell the flat.
In 2009 we were called by Dr A Thomas who, having owned a studio apartment in Southgate in April 2004. The question was if we could estimate the price could be to extend the lease by 90 years. Comparable properties in Southgate with 100 year plus lease were worth £275,000. The average amount of ground rent was £45 collected monthly. The lease concluded in 2094. Considering the 68 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 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 related to 2 flats. The number of years remaining on the existing lease(s) was 70.31 years.