Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Haddenham. Clearly, the period of lease remaining reduces over time. This is often overlooked and only becomes a problem when the flat or house has to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Eligible leaseholders in Haddenham have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. You should give due attention before putting off your Haddenham lease extension. Putting off that expense now simply increases the price you will eventually have to pay to extend your lease
Leasehold premises in Haddenham with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Godiva Mortgages | 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. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Haddenham,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Haddenham valuers.
Riley owned a studio apartment in Haddenham being sold with a lease of just over sixty years outstanding. Riley informally approached his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Riley to invoke his statutory right. Riley obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Last Spring we were contacted by Mr and Mrs. V Patel , who owned a studio flat in Haddenham in August 1998. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Identical flats in Haddenham with an extended lease were valued about £205,000. The mid-range ground rent payable was £50 invoiced annually. The lease finished in 2104. Considering the 79 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £7,600 and £8,800 not including costs.
In 2009 we were approached by Mr and Mrs. S Michel who, having acquired a basement apartment in Haddenham in March 2004. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable flats in Haddenham with an extended lease were in the region of £275,000. The average ground rent payable was £65 collected per annum. The lease came to a finish in 2093. Given that there were 68 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus expenses.