Hampstead leases on domestic properties are gradually losing value. if your lease has about 90 years left, you should start considering the need for a lease extension. 80 years is a significant number: when the remaining term of a lease dips below this level then you begin incurring an additional element called marriage value. Leasehold owners in Hampstead will mostly qualify for a lease extension; however a solicitor should be able check if you qualify. In some circumstances you may not be entitled. There are prescribed timetables and procedures to comply with once the process has started so it’s wise to be guided by a conveyancer during the process.
It is generally considered that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Hampstead 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 lawyer we work with provide it.
14 months ago Theo, came dangerously close to the 80-year mark with the lease on his two bedroom flat in Hampstead. Having bought his home twenty years ago, the unexpired term was of no concern. As luck would have it, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Theo arranged for a lease extension just ahead of time last April. Theo and the landlord subsequently agreed on sum of £6,000 . If he had missed the deadline, the amount would have increased by at least £1,150.
Mr and Mrs. H André moved into a garden apartment in Hampstead in November 2011. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical properties in Hampstead with 100 year plus lease were valued around £265,000. The mid-range amount of ground rent was £50 collected monthly. The lease elapsed on 16 June 2098. Considering the 73 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus expenses.
An example of a Lease Extension matter before the tribunal for a Hampstead premises 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 related to 2 flats. The unexpired residue of the current lease was 16.83 and 16.43.