Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in High Peak. Inevitably, the term of lease remaining shortens as time goes by. This may slip by relatively unnoticed when the flat or house has to be sold or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Qualifying leaseholders in High Peak have the right to extend the lease for an additional 90 years under Leasehold Reform legislation. Do give due consideration before putting off your High Peak lease extension. Holding off the cost now only increases the price you will ultimately incur to extend your lease
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in High Peak,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with High Peak valuers.
Last October Jude, started to get close to the eighty-year threshold with the lease on his basement flat in High Peak. Having bought his home two decades ago, the length of the lease was of minimal significance. As luck would have it, he noticed he needed to take action soon on a lease extension. Jude extended the lease just under the wire last March. Jude and the freeholder via the managing agents in the end settled on the final figure of £5,000 . If the lease had slipped lower than eighty years, the premium would have become more exhorbitant by at least £1,050.
Last Autumn we were contacted by Mr and Mrs. I Ali , who moved into a one bedroom apartment in High Peak in September 1997. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in High Peak with an extended lease were worth £242,600. The average amount of ground rent was £45 billed every twelve months. The lease finished on 25 September 2092. Taking into account 67 years as a residual term we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 not including professional charges.
In 2011 we were phoned by Mr and Mrs. W Bennett who, having purchased a basement flat in High Peak in June 1997. The question was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by a further 90 years. Identical homes in High Peak with an extended lease were in the region of £280,000. The average amount of ground rent was £55 billed annually. The lease lapsed in 2103. Having 78 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of professional charges.