The market value of Hartfield leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase significantly once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service gives you enhanced control over the value of your Hartfield leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harry was the the leasehold proprietor of a high value flat in Hartfield being marketed with a lease of fraction over sixty years remaining. Harry on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harry to exercise his statutory right. Harry obtained expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
In 2012 we were contacted by Mr Alexander Rose who, having purchased a one bedroom flat in Hartfield in March 2006. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Comparable homes in Hartfield with a long lease were worth £264,000. The mid-range amount of ground rent was £60 collected per annum. The lease lapsed on 8 September 2079. Considering the 53 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £37,100 and £42,800 exclusive of fees.
Last year we were phoned by Dr S Young , who moved into a purpose-built flat in Hartfield in January 2005. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Comparable premises in Hartfield with a long lease were in the region of £220,400. The mid-range ground rent payable was £45 billed quarterly. The lease expired in 2090. Given that there were 64 years unexpired we calculated the premium to the freeholder for the lease extension to be between £15,200 and £17,600 exclusive of fees.