The market value of Forest Hall leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the unexpired lease term is below than 80 years
Leasehold premises in Forest Hall with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 Forest Hall 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.
Half a year ago Hugo, started to get near to the 80-year threshold with the lease on his garden apartment in Forest Hall. In buying his flat two decades ago, the lease term was of little bearing. As luck would have it, he became aware that he would soon be paying way over the odds for a lease extension. Hugo was able to extend his lease at the eleventh hour last January. Hugo and the landlord who owned the flat above in the end agreed on sum of £6,000 . If he not met the deadline, the amount would have gone up by a minimum £1,000.
Dr R Ali was assigned a lease of a basement flat in Forest Hall in November 2009. The question was if we could estimate the premium would be to prolong the lease by ninety years. Comparative homes in Forest Hall with an extended lease were in the region of £205,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease came to a finish in 2104. Given that there were 79 years left we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.
In 2012 we were e-mailed by Dr Chelsea Collins who, having moved into a purpose-built apartment in Forest Hall in January 1997. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Comparable premises in Forest Hall with a long lease were in the region of £275,000. The average ground rent payable was £65 collected monthly. The lease concluded in 2093. Considering the 68 years as a residual term we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including costs.