For anyone whose Berkhamsted property is held on a long lease, our message is clear – if you do nothing, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension.
Leasehold properties in Berkhamsted with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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. |
| Birmingham Midshires | 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. |
| 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 undertake Berkhamsted 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 lawyer we work with provide it.
Last October Ibrahim, came dangerously near to the 80-year mark with the lease on his garden apartment in Berkhamsted. Having bought his flat two decades ago, the length of the lease was of little relevance. As luck would have it, he became aware that he would soon be paying an escalated premium for Extending the lease. Ibrahim extended the lease just in the nick of time in July. Ibrahim and the landlord who owned the flat above in the end settled on the final figure of £5,000 . If the lease had gone below eighty years, the amount would have become more costly by at least £975.
In 2014 we were e-mailed by Mr and Mrs. P Norbert who, having purchased a purpose-built apartment in Berkhamsted in January 2009. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable premises in Berkhamsted with a long lease were worth £260,000. The average amount of ground rent was £50 billed monthly. The lease lapsed in 2097. Considering the 72 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.
Last February we were approach by Mr and Mrs. M Sharif , who owned a first floor flat in Berkhamsted in October 2011. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparative flats in Berkhamsted with 100 year plus lease were worth £261,600. The mid-range amount of ground rent was £60 billed monthly. The lease termination date was in 2077. Having 52 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £39,000 and £45,000 not including fees.