Halstead leases on residential properties are gradually losing 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 Halstead residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Halstead you must investigate if your lease has between seventy and ninety years left. There are good reasons why a Halstead leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is effected without delay
It is generally considered that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers that we work with handle Halstead 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.
Stanley owned a conversion flat in Halstead on the market with a lease of fraction over 59 years unexpired. Stanley informally 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 on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Stanley to invoke his statutory right. Stanley procured expert legal guidance and was able to make a more informed decision and handle with the matter and sell the property.
Last Spring we were approach by Mr and Mrs. Y Simon , who moved into a ground floor apartment in Halstead in March 1998. We are asked if we could approximate the price would be for a ninety year lease extension. Identical flats in Halstead with an extended lease were worth £261,600. The mid-range ground rent payable was £60 billed annually. The lease lapsed on 20 September 2077. Having 52 years unexpired we calculated the premium to the landlord for the lease extension to be between £39,000 and £45,000 plus fees.
Last year we were called by Mr Ethan Bell , who bought a basement apartment in Halstead in September 2001. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Comparable residencies in Halstead with an extended lease were valued about £218,000. The average ground rent payable was £45 invoiced per annum. The lease finished in 2088. Considering the 63 years as a residual term we calculated the premium to the landlord for the lease extension to be within £17,100 and £19,800 not including costs.