As the the remaining lease term of a Hedon residential lease decreases so does its value and therefore the value of your property. Where the lease has, in excess of 100 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has under than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner as opposed to later. Most flat owners in Hedon will meet the qualifying criteria; that being said a conveyancer can advise whether you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with undertake 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 conveyancing solicitor we work with provide it.
Last Spring Austin, came perilously close to the 80-year threshold with the lease on his ground floor flat in Hedon. Having purchased his flat twenty years ago, the unexpired term was of little concern. Thankfully, he noticed he needed to take action soon on Extending the lease. Austin was able to extend his lease at the eleventh hour last May. Austin and the freeholder via the managing agents in the end agreed on sum of £5,000 . If the lease had dropped below 80 years, the premium would have escalated by a minimum £1,150.
Last Summer we were e-mailed by Mr and Mrs. K Moore , who owned a basement flat in Hedon in April 1997. We are asked if we could approximate the premium would be to prolong the lease by ninety years. Comparative properties in Hedon with an extended lease were in the region of £200,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease elapsed in 2103. Taking into account 77 years left we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus fees.
Last Winter we were approach by Mrs Bethany Ricardo , who moved into a garden flat in Hedon in November 2005. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparative residencies in Hedon with 100 year plus lease were in the region of £260,200. The average amount of ground rent was £65 invoiced monthly. The lease terminated on 22 February 2092. Taking into account 66 years left we estimated the compensation to the freeholder to extend the lease to be between £15,200 and £17,600 exclusive of legals.