Hampstead leases on residential properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start considering the need for a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you start incurring an additional element called marriage value. Leasehold owners in Hampstead will mostly be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In certain cases you may not qualify. There are prescribed timetables and formalities to follow once the process is initiated so it’s prudent to be guided by a lawyer during the process.
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a landlord in Hampstead,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hampstead valuers.
Off the back of unsuccessful negotiations with the freeholder of her basement apartment in Hampstead, Isabelle commenced the lease extension process just as her lease was approaching the all-important 80-year mark. The transaction completed in June 2013. The landlord’s fees were kept to an absolute minimum.
Last Winter we were phoned by Mr and Mrs. D Harris , who bought a garden apartment in Hampstead in April 1997. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative homes in Hampstead with an extended lease were in the region of £191,000. The mid-range ground rent payable was £65 collected yearly. The lease ended on 24 September 2083. Given that there were 58 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 not including costs.
An example of a Lease Extension matter before the tribunal for a Hampstead flat is Raised Ground Floor Flat 20 Fitzjohns Avenue in July 2014. the Tribunal decided that the premiums to be paid for new leases in respect of the Raised Ground Floor Flat and the First Floor Flat were to be calculated as: Raised Ground Floor: £765,175.14 First Floor: £601,617.77 This case affected 2 flats. The unexpired residue of the current lease was 16.83 and 16.43.