Unfortunately that a Heath residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Heath property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under eighty years - otherwise a higher premium will be due. Most leasehold owners in Heath will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Heath with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| 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 Heath can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and valuer with experience in this area.
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 a wealth of experience procuring Heath lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Trailing unsuccessful discussions with the freeholder of her purpose-built flat in Heath, Amy commenced the lease extension process just as her lease was nearing the crucial 80-year mark. The legal work completed in September 2010. The freeholder’s costs were kept to an absolute minimum.
Ms G López owned a first floor flat in Heath in April 1999. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Comparative flats in Heath with an extended lease were valued around £285,000. The mid-range amount of ground rent was £45 billed quarterly. The lease lapsed in 2096. Having 71 years remaining we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of expenses.
Mrs R François owned a purpose-built apartment in Heath in November 2011. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparative flats in Heath with an extended lease were worth £225,800. The mid-range ground rent payable was £60 collected monthly. The lease ended on 12 October 2085. Having 60 years outstanding we estimated the premium to the freeholder to extend the lease to be within £23,800 and £27,400 plus legals.