Palmers Green leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Palmers Green residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Palmers Green you would be well advised to see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Palmers Green with over one hundred 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 home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Palmers Green can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Palmers Green lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Caleb owned a high value apartment in Palmers Green on the market with a lease of a few days over fifty eight years left. Caleb on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 annually. No ground rent would be due on a lease extension were Caleb to invoke his statutory right. Caleb procured expert legal guidance and was able to make a more informed decision and handle with the matter and sell the property.
Last Christmas we were e-mailed by Dr Yasmin Sánchez , who was assigned a lease of a first floor flat in Palmers Green in May 1999. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Palmers Green with an extended lease were worth £280,000. The average amount of ground rent was £45 billed annually. The lease expired in 2093. Given that there were 69 years unexpired we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including professional charges.
An example of a Lease Extension case for a Palmers Green property is First Floor Flat 109 Lyndhurst Road in May 2010. Following a vesting order by Edmonton County Court on 29th October 2009 the Tribunal decided on a figure of £5,012 for a lease extension. This case affected 1 flat. The unexpired lease term was 81.79 years.