The value of Histon leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the unexpired lease term is less than eighty years
Leasehold properties in Histon with over one hundred years left 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 premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Yorkshire 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. |
Lease extensions in Histon can be a difficult process. We recommend you get guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Histon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Isaac owned a high value flat in Histon on the market with a lease of a little over 61 years remaining. Isaac informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Isaac to exercise his statutory right. Isaac procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
Dr Ali Pérez took over the lease of a one bedroom flat in Histon in July 2003. The question was if we could estimate the premium would be for a 90 year lease extension. Comparable properties in Histon with a long lease were worth £250,000. The average amount of ground rent was £50 invoiced quarterly. The lease ran out in 2094. Having 68 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 plus legals.
In 2013 we were e-mailed by Dr U Harris who, having bought a garden flat in Histon in March 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Identical flats in Histon with a long lease were valued around £285,000. The mid-range ground rent payable was £55 collected per annum. The lease finished in 2105. Considering the 79 years remaining we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of fees.