The market value of Hale End leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the remaining term is less than 80 years
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Hale End leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Ryan was the the leasehold proprietor of a high value flat in Hale End being marketed with a lease of a few days over fifty eight years left. Ryan informally approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Ryan to exercise his statutory right. Ryan procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2011 we were e-mailed by Ms M Sharif who, having acquired a purpose-built apartment in Hale End in August 1999. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable premises in Hale End with 100 year plus lease were worth £205,000. The average ground rent payable was £50 collected yearly. The lease expired on 1 January 2104. Having 79 years as a residual term we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including expenses.
In 2014 we were contacted by Mr T Bertrand who, having was assigned a lease of a ground floor flat in Hale End in August 1999. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparative premises in Hale End with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £65 billed annually. The lease terminated on 14 February 2093. Considering the 68 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.