It’s a harsh certainty that a Hungerford residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Hungerford property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term falls under 80 years, you will end up paying half 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 additional value that a lease extension will add the property The majority of flat owners in Hungerford will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
Retaining our service will provide you increased control over the value of your Hungerford leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing protracted negotiations with the landlord of her studio flat in Hungerford, Olivia initiated the lease extension process as the eighty year deadline was swiftly advancing. The transaction was concluded in July 2007. The freeholder’s costs were restricted to a tad over 500 pounds.
Mrs O Young was assigned a lease of a purpose-built flat in Hungerford in September 1999. We are asked if we could estimate the premium would be to extend the lease by an additional years. Identical residencies in Hungerford with a long lease were valued around £230,800. The mid-range amount of ground rent was £60 collected quarterly. The lease end date was in 2085. Taking into account 60 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £24,700 and £28,600 exclusive of legals.
Last Winter we were called by Dr Robyn Ali , who acquired a ground floor flat in Hungerford in August 2009. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Identical premises in Hungerford with a long lease were in the region of £210,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease concluded in 2105. Given that there were 80 years unexpired we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of legals.