It’s an underpublicised certainty that a Holywell residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Holywell property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term dips below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Holywell will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold properties in Holywell with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Holywell,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Holywell valuers.
Leon was the the leasehold proprietor of a 2 bedroom flat in Holywell being sold with a lease of a few days over 59 years outstanding. Leon on an informal basis spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leon to exercise his statutory right. Leon obtained expert advice and was able to make an informed judgement and handle with the matter and sell the property.
In 2010 we were called by Mr and Mrs. G Collins who, having completed a newly refurbished apartment in Holywell in August 2007. The dilemma was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Holywell with an extended lease were valued around £240,600. The average amount of ground rent was £60 invoiced every twelve months. The lease expiry date was in 2086. Given that there were 62 years remaining we approximated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of expenses.
Dr T Alexander moved into a garden apartment in Holywell in June 1998. We are asked if we could estimate the price would be for a ninety year extension to my lease. Comparable premises in Holywell with 100 year plus lease were valued about £174,200. The average amount of ground rent was £55 invoiced annually. The lease finished in 2075. Given that there were 51 years remaining we estimated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus costs.