Unfortunately that a Hale residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Hale property market.Once your lease nears 85ish years, you should start thinking about 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 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Hale will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Hale,the lease extension lawyers 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 Hale valuers.
Off the back of protracted negotiations with the landlord of her studio flat in Hale, Kayleigh initiated the lease extension process just as the lease was approaching the crucial 80-year deadline. The legal work completed in January 2014. The freeholder’s fees were restricted to about 650 pounds.
Last Winter we were phoned by Mr and Mrs. M André , who took over the lease of a first floor apartment in Hale in September 2011. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar residencies in Hale with an extended lease were in the region of £225,800. The average amount of ground rent was £60 collected yearly. The lease expiry date was on 19 August 2085. Taking into account 60 years left we calculated the premium to the freeholder to extend the lease to be between £23,800 and £27,400 plus fees.
Last Spring we were contacted by Mr and Mrs. D Lefèvre , who owned a first floor flat in Hale in May 2004. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Comparable properties in Hale with an extended lease were worth £210,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease ended on 7 August 2105. Considering the 80 years remaining we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of legals.