For those whose Hoole property is held on a long lease, our message is clear – if you ignore the situation, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to procure a lease extension.
It is conventional wisdom 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 premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 Hoole,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hoole valuers.
Ollie was the the leasehold proprietor of a 2 bedroom apartment in Hoole on the market with a lease of a little over 72 years unexpired. Ollie informally contacted his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Ollie to exercise his statutory right. Ollie obtained expert advice and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Last Spring we were called by Mr and Mrs. O Cook , who moved into a garden apartment in Hoole in May 2009. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical flats in Hoole with a long lease were worth £191,400. The mid-range ground rent payable was £55 collected every twelve months. The lease expired in 2079. Considering the 54 years remaining we approximated the premium to the landlord for the lease extension to be within £34,200 and £39,600 not including professional charges.
Mr and Mrs. L Torres was assigned a lease of a purpose-built apartment in Hoole in July 2003. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by an additional years. Similar properties in Hoole with an extended lease were worth £295,000. The average amount of ground rent was £45 collected per annum. The lease finished on 28 October 2099. Taking into account 74 years remaining we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of costs.