Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Hadley Wood. Inevitably, the term of lease left reduces as time goes by. This may slip by relatively unnoticed when the property needs to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Qualifying long lease owners in Hadley Wood have the legal entitlement to extend the lease for a further 90 years under legislation. Please give due consideration before putting off your Hadley Wood lease extension. Holding off that expense now only increases the price you will ultimately have to pay to extend your lease
Leasehold properties in Hadley Wood with over 100 years unexpired 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 conveyancers that we work with undertake Hadley Wood 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 conveyancing solicitor we work with provide it.
In recent months Jasper, started to get close to the 80-year mark with the lease on his garden apartment in Hadley Wood. Having purchased his property 18 years ago, the length of the lease was of little importance. Luckily, he became aware that he needed to take steps soon on Extending the lease. Jasper arranged for a lease extension just under the wire in March. Jasper and the landlord who owned the flat above subsequently agreed on a premium of £6,000 . If the lease had dropped below 80 years, the sum would have become more exhorbitant by at least £1,075.
In 2013 we were phoned by Mrs Imogen Brown who, having was assigned a lease of a basement apartment in Hadley Wood in July 2011. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar properties in Hadley Wood with an extended lease were in the region of £166,400. The average ground rent payable was £60 billed per annum. The lease lapsed on 25 February 2078. Having 54 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £32,300 and £37,400 not including professional charges.
An example of a Lease Extension matter before the tribunal for a Hadley Wood property is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case related to 1 flat. The unexpired term as at the valuation date was 76 years.