The market value of a leasehold property in Hermitage is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is preferable to commence the lease extension process when the lease still has 82 years to run so that formalities can be concluded in advance of the eighty year mark. Statute entitles Hermitage qualifying lessees to an additional term of 90 years in addition to the unexpired term, at a peppercorn rent (no ground rent). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Hermitage with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Hermitage 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 conveyancer we work with provide it.
Jude was the the leasehold proprietor of a conversion apartment in Hermitage being marketed with a lease of a little over sixty years remaining. Jude informally approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Jude to exercise his statutory right. Jude procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were called by Mr and Mrs. W Bailey , who owned a purpose-built flat in Hermitage in February 2012. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by ninety years. Similar premises in Hermitage with 100 year plus lease were worth £243,000. The mid-range ground rent payable was £65 billed per annum. The lease expired in 2088. Considering the 63 years unexpired we estimated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 plus expenses.
Mr and Mrs. K David owned a studio flat in Hermitage in June 2010. The dilemma was if we could approximate the price would be to extend the lease by ninety years. Similar premises in Hermitage with 100 year plus lease were valued around £181,600. The average amount of ground rent was £55 billed every twelve months. The lease concluded in 2077. Taking into account 52 years outstanding we approximated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 plus expenses.