It’s an underpublicised certainty that a Hale End residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Hale End property prices.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 dips below 80 years - otherwise a higher amount will be payable. The majority of leasehold owners in Hale End will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you enhanced control over the value of your Hale End leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Zachary, started to get close to the eighty-year threshold with the lease on his studio flat in Hale End. In buying his home two decades ago, the lease term was of little interest. Fortunately, he noticed he would soon be paying an inflated amount for a lease extension. Zachary arranged for a lease extension just ahead of time last March. Zachary and the freeholder ultimately agreed on a premium of £5,000 . If the lease had slid to less than eighty years, the figure would have increased by a minimum £925.
Last month we were phoned by Mr Jude Gunderson , who owned a basement apartment in Hale End in June 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparable premises in Hale End with an extended lease were valued around £290,000. The mid-range ground rent payable was £45 billed quarterly. The lease elapsed in 2099. Taking into account 73 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.
Last year we were contacted by Mr and Mrs. N Petit , who bought a first floor flat in Hale End in August 2002. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable flats in Hale End with an extended lease were in the region of £240,600. The average ground rent payable was £65 collected per annum. The lease elapsed in 2088. Given that there were 62 years left we approximated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of professional charges.