Hedon leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Hedon tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Hedon you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the property will be equivalent in value to 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| 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 conveyancing solicitors that we work with handle Hedon 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.
Subsequent to lengthy negotiations with the landlord of her first floor apartment in Hedon, Hannah commenced the lease extension process just as the lease was nearing the critical eighty-year mark. The lease extension was concluded in April 2006. The landlord’s charges were restricted to under 500 GBP.
Ms L Morgan bought a studio apartment in Hedon in March 1997. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar premises in Hedon with 100 year plus lease were in the region of £208,600. The mid-range amount of ground rent was £60 invoiced monthly. The lease ran out on 4 February 2083. Taking into account 57 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 exclusive of legals.
Last Autumn we were contacted by Mrs Shannon Girard , who owned a one bedroom apartment in Hedon in May 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Similar homes in Hedon with an extended lease were worth £200,000. The mid-range ground rent payable was £50 invoiced monthly. The lease elapsed on 20 October 2103. Taking into account 77 years as a residual term we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including costs.