It’s an underpublicised certainty that a Highnam residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Highnam property prices.Once your lease gets to 85ish years, you need to start considering 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 falls under eighty years - otherwise a higher amount will be due. Most flat owners in Highnam will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the process.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Highnam 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 lawyer we work with provide it.
During the course of the last few months Max, started to get close to the eighty-year threshold with the lease on his ground floor flat in Highnam. Having bought his flat 18 years ago, the unexpired term was of no bearing. As luck would have it, he became aware that he would soon be paying way over the odds for Extending the lease. Max was able to extend his lease just under the wire in July. Max and the landlord eventually agreed on a premium of £5,000 . If the lease had dipped below eighty years, the sum would have gone up by a minimum £1,025.
Last Winter we were e-mailed by Ms R Campbell , who completed a one bedroom apartment in Highnam in August 2011. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Highnam with an extended lease were valued about £171,800. The mid-range amount of ground rent was £55 billed yearly. The lease expired in 2076. Having 50 years left we calculated the premium to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of professional charges.
Mr and Mrs. D Mason took over the lease of a garden flat in Highnam in July 2005. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Similar residencies in Highnam with a long lease were worth £280,000. The average ground rent payable was £45 invoiced monthly. The lease came to a finish in 2096. Having 70 years remaining we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of expenses.