Unfortunately that a Highnam residential lease is a deteriorating 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 market.Where your lease has approximately 90 years left, you should start thinking about 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 dips under eighty years - otherwise a higher amount will be due. The majority of flat owners in Highnam will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold residencies in Highnam with more than one hundred years remaining 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 situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Godiva Mortgages | |
| Halifax | |
| Skipton Building Society | |
| Royal Bank of Scotland |
The conveyancing solicitors 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 conveyancer we work with provide it.
After protracted correspondence with the landlord of her ground floor flat in Highnam, Rachael started the lease extension process as the eighty year threshold was fast advancing. The legal work was concluded in August 2005. The freeholder’s costs were kept to an absolute minimum.
In 2011 we were contacted by Mr E Murphy who, having was assigned a lease of a garden flat in Highnam in July 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable residencies in Highnam with an extended lease were worth £174,200. The mid-range amount of ground rent was £55 billed yearly. The lease termination date was in 2077. Taking into account 51 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 not including costs.
In 2013 we were e-mailed by Dr Y Hernández who, having acquired a purpose-built apartment in Highnam in October 2011. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Comparable flats in Highnam with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £45 collected per annum. The lease terminated in 2097. Given that there were 71 years unexpired we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.