It’s an underpublicised certainty that a Holmrook residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Holmrook property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If lease term dips under eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Holmrook will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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. |
| 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 |
The lawyers that we work with procure Holmrook 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 negotiations with the landlord of her basement flat in Holmrook, Jordan initiated the lease extension process just as her lease was approaching the all-important eighty-year mark. The legal work was concluded in November 2010. The landlord’s fees were kept to an absolute minimum.
Mrs L Torres owned a garden apartment in Holmrook in April 2011. We are asked if we could approximate the premium would likely be to prolong the lease by 90 years. Comparable properties in Holmrook with an extended lease were valued around £181,600. The mid-range amount of ground rent was £55 invoiced quarterly. The lease ended on 21 September 2077. Given that there were 52 years left we estimated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 plus fees.
Dr Harry White bought a basement apartment in Holmrook in September 1997. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Similar homes in Holmrook with an extended lease were worth £290,000. The average ground rent payable was £45 invoiced quarterly. The lease expired in 2097. Having 72 years left we calculated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of expenses.