It’s an underpublicised certainty that a Hagley residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Hagley property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Hagley will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Chelsea 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. |
| 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. |
| Godiva Mortgages | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Hagley,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hagley valuers.
John was the the leasehold owner of a studio apartment in Hagley being marketed with a lease of a few days over fifty eight years outstanding. John informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were John to exercise his statutory right. John obtained expert legal guidance and secured satisfactory resolution without going to tribunal and readily saleable.
In 2010 we were contacted by Mr H Thompson who, having bought a studio apartment in Hagley in September 2007. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Comparative residencies in Hagley with an extended lease were in the region of £203,200. The mid-range amount of ground rent was £65 invoiced per annum. The lease lapsed on 7 March 2087. Given that there were 61 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 exclusive of expenses.
Last Spring we were called by Dr Alexander Sharif , who moved into a one bedroom apartment in Hagley in May 2000. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Identical properties in Hagley with a long lease were valued about £260,000. The mid-range amount of ground rent was £50 billed per annum. The lease finished on 10 May 2098. Having 72 years unexpired we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including expenses.