It’s a harsh certainty that a Hale Barns residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Hale Barns property prices.Once your lease nears 85ish years, you need to 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 falls below 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Hale Barns will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in Hale Barns with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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 |
The conveyancing solicitors that we work with handle Hale Barns 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.
Trailing unsuccessful correspondence with the landlord of her garden flat in Hale Barns, Catherine commenced the lease extension process as the 80 year mark was quickly approaching. The legal work was concluded in June 2007. The freeholder’s fees were kept to an absolute minimum.
Mr R Ali moved into a studio apartment in Hale Barns in August 2000. The dilemma was if we could approximate the price would likely be for a 90 year extension to my lease. Identical residencies in Hale Barns with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £60 collected monthly. The lease ended on 8 April 2105. Considering the 80 years unexpired we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus expenses.
Mr W David bought a one bedroom flat in Hale Barns in October 2009. The question was if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Identical properties in Hale Barns with an extended lease were valued about £200,800. The mid-range ground rent payable was £65 collected per annum. The lease elapsed in 2085. Considering the 60 years left we calculated the premium to the landlord for the lease extension to be within £20,900 and £24,200 plus professional charges.