Hawkshead residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
It is generally accepted that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with undertake Hawkshead 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.
Freddie owned a high value flat in Hawkshead on the market with a lease of just over fifty eight years left. Freddie informally spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert legal guidance and secured an acceptable resolution informally and readily saleable.
In 2012 we were called by Mrs B Bennett who, having was assigned a lease of a basement flat in Hawkshead in May 2001. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Comparable residencies in Hawkshead with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £55 billed every twelve months. The lease concluded on 21 April 2105. Given that there were 79 years left we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including professional charges.
Dr David Lee acquired a purpose-built flat in Hawkshead in June 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative residencies in Hawkshead with 100 year plus lease were in the region of £193,400. The average amount of ground rent was £65 collected monthly. The lease terminated on 7 August 2085. Taking into account 59 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 not including professional charges.