Hawkshead 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 Hawkshead residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Hawkshead you should check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Hawkshead with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Hawkshead can be a difficult process. We recommend you secure guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Hawkshead lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Kyle, started to get near to the eighty-year threshold with the lease on his studio flat in Hawkshead. Having purchased his flat 19 years ago, the unexpired term was of no bearing. by good luck, it dawned on him that he needed to take steps soon on Extending the lease. Kyle arranged for a lease extension at the eleventh hour in May. Kyle and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If the lease had descended lower than 80 years, the amount would have escalated by a minimum £875.
In 2013 we were e-mailed by Mr and Mrs. U Peterson who, having moved into a basement flat in Hawkshead in June 2000. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Identical flats in Hawkshead with a long lease were in the region of £227,800. The average amount of ground rent was £45 collected yearly. The lease expiry date was on 21 July 2090. Taking into account 65 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus fees.
Last Winter we were phoned by Mr and Mrs. U González , who took over the lease of a purpose-built flat in Hawkshead in January 1999. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by ninety years. Identical flats in Hawkshead with an extended lease were in the region of £275,000. The mid-range ground rent payable was £55 collected annually. The lease terminated in 2101. Given that there were 76 years left we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.