Hedon leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Hedon enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Hedon you should check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Hedon with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 lawyers 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.
In the wake of 9 months of protracted discussions with the freeholder of her one bedroom flat in Hedon, Molly initiated the lease extension process just as her lease was coming close to the crucial 80-year threshold. The lease extension completed in January 2005. The landlord’s fees were restricted to about four hundred GBP.
Last March we were phoned by Dr A Morris , who completed a ground floor apartment in Hedon in July 2012. We are asked if we could shed any light on how much (approximately) price would likely be to extend the lease by ninety years. Similar residencies in Hedon with 100 year plus lease were worth £198,800. The mid-range ground rent payable was £55 collected every twelve months. The lease lapsed on 25 October 2080. Having 55 years remaining we calculated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 not including fees.
In 2012 we were contacted by Mr and Mrs. Y Martin who, having acquired a garden apartment in Hedon in January 2001. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Identical flats in Hedon with an extended lease were valued about £295,000. The mid-range amount of ground rent was £50 collected monthly. The lease terminated in 2100. Having 75 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus costs.