The re-sale value of a leasehold property in Hessle depends on how many years the lease has left to run. If it is close to or less than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that formalities can be finalised ahead of the 80 year threshold. Current legislation enables Hessle qualifying lessees to an additional term of ninety years on top of the remaining term, at a peppercorn rent (no ground rent). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Hessle with more than 100 years unexpired 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 freehold unless savings on ground rent and service charges merit it.
| 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. |
| 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Hessle leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Callum, came precariously near to the eighty-year threshold with the lease on his basement apartment in Hessle. Having purchased his flat two decades ago, the unexpired term was of little bearing. Fortunately, he realised he needed to take steps soon on Extending the lease. Callum arranged for a lease extension just under the wire in September. Callum and the freeholder subsequently agreed on a premium of £6,000 . If the lease had dipped lower than 80 years, the price would have become more costly by a minimum £1,025.
In 2012 we were approached by Ms Isabelle Thomas who, having was assigned a lease of a purpose-built flat in Hessle in September 2007. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Identical homes in Hessle with 100 year plus lease were worth £171,800. The mid-range ground rent payable was £55 invoiced quarterly. The lease end date was in 2076. Given that there were 50 years unexpired we calculated the premium to the landlord for the lease extension to be between £32,300 and £37,400 plus expenses.
Last Spring we were phoned by Mr and Mrs. F Peterson , who bought a newly refurbished apartment in Hessle in April 2001. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Comparative residencies in Hessle with a long lease were valued about £280,000. The average ground rent payable was £45 invoiced per annum. The lease termination date was on 5 November 2096. Considering the 70 years unexpired we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.