The re-sale value of a leasehold property in Hale End is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that a lease extension can be concluded in advance of the eighty year mark. Leasehold Reform legislation entitles Hale End qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Hale End 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.
14 months ago Blake, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Hale End. In buying his property two decades ago, the length of the lease was of no interest. Fortunately, he noticed he needed to take action soon on a lease extension. Blake was able to extend his lease just ahead of time last June. Blake and the landlord in the end settled on an amount of £5,500 . If the lease had fallen lower than eighty years, the amount would have gone up by a minimum £925.
Dr Dylan Ali bought a first floor flat in Hale End in August 1997. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Similar properties in Hale End with a long lease were in the region of £230,800. The average amount of ground rent was £60 invoiced quarterly. The lease elapsed in 2085. Taking into account 60 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £24,700 and £28,600 plus expenses.
In 2010 we were contacted by Dr B García who, having completed a purpose-built apartment in Hale End in January 1997. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Identical premises in Hale End with a long lease were worth £210,000. The mid-range ground rent payable was £50 invoiced per annum. The lease terminated on 8 May 2105. Taking into account 80 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of legals.