Unfortunately that a Hedon residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Hedon property market.Once your lease gets to 85ish years, you should 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 payable. Most leasehold owners in Hedon will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold properties in Hedon with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Hedon leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Harry owned a studio flat in Hedon being marketed with a lease of fraction over fifty eight years outstanding. Harry on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Harry to invoke his statutory right. Harry procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Mr and Mrs. E Mitchell moved into a one bedroom apartment in Hedon in January 2006. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative premises in Hedon with a long lease were valued around £225,800. The average ground rent payable was £60 collected annually. The lease expiry date was on 1 February 2085. Considering the 60 years remaining we calculated the premium to the landlord for the lease extension to be within £23,800 and £27,400 not including fees.
Last month we were called by Mr K Cook , who owned a basement apartment in Hedon in April 1995. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable residencies in Hedon with a long lease were in the region of £210,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease finished in 2105. Having 80 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.