3 questions to ask before buying a flat in Newington Green
Many flat hunters set their sights on buying property in Newington Green because this vibrant part of North London combines its status as a conservation area with a wealth of Grade II-listed buildings, quick and convenient transport links to central London and some of the best restaurants in the capital on the doorstep.
Not only that, the property mix in Newington Green includes eco-friendly new-build apartments and spacious period conversion flats that provide room for young families.
Whether you are a young professional, have a young family or even a student seeking to buy a property, it is worth noting that the vast majority of flats for sale in Newington Green – and the nearby areas of Islington, Highbury, Hackney and Stoke Newington that M&M Property has an in-depth knowledge of – are leasehold properties. When buying leasehold property in Newington Green, purchasers are advised to consider three factors…
1. How long is left on the lease?
No two leases are the same, but many granted for new-build properties run for 99 years, although their length is now more commonly 125 years, while some developers provide 999-year leases on apartments.
As the lease gets shorter, the leasehold property reduces in value long before the agreement is due to expire.
Under the Leasehold Reform, Housing and Urban Development Act 1993, the landlord is entitled to half of the increase in the value of the property when a lease with less than 80 years to run is extended.
This is called the marriage fee because when the value of the property and longer lease are combined (or married together) they exceed the combined value of the separate entities.
Not only that, potential purchasers of flats with leases of under 80 years remaining who use a mortgage to part-fund the transaction could find it harder to obtain a loan on the property, which is highly likely to devalue their sale value.
2. How much is the ground rent?
This is the rent payable to the landlord on an annual or half-yearly basis. While it is usually a token payment in the region of £200 or £300 a year for properties in Newington Green, and in some cases zero, some landlords can charge thousands of pounds each year.
Beware that the landlords of some new-build developments in Newington Green are now inserting clauses into the leases they provide that state the ground rent will increase every 10 years.
3. What are the service charges?
To cover the costs of insuring and maintaining the fabric of the building and the shared areas of the development, the landlord or managing agent will charge service charges and sometimes management charges too.
While charges vary depending on the size of the development, value of the flat and level of maintenance works required, some service charges include contributions to a reserve or sinking fund that is used to cover future large one-off bills.
M&M Property’s News section contains a wealth of information about buying, selling, renting and letting homes in and around Newington Green.
Click on the links to discover more about the difference between leasehold and freehold homes in Newington Green and ways to extend the lease on your flat.
For further information about leasehold property for sale in and around Newington Green, contact M&M Property today.