Unfortunately that a Halifax residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Halifax property prices.Once your lease nears 85ish years, you need to 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 lower than eighty years - otherwise a higher amount will be due. Most leasehold owners in Halifax will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold residencies in Halifax with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you increased control over the value of your Halifax leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alfie owned a 2 bedroom apartment in Halifax being sold with a lease of just over fifty eight years left. Alfie informally approached his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Alfie to invoke his statutory right. Alfie obtained expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2012 we were called by Mr and Mrs. R Lewis who, having moved into a ground floor flat in Halifax in October 2000. The question was if we could approximate the price would be to prolong the lease by an additional years. Comparative homes in Halifax with a long lease were in the region of £184,000. The mid-range amount of ground rent was £55 billed every twelve months. The lease finished on 1 June 2078. Given that there were 53 years outstanding we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including fees.
Last month we were contacted by Ms B Rodríguez , who purchased a one bedroom apartment in Halifax in April 2000. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by ninety years. Comparable properties in Halifax with an extended lease were worth £290,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease lapsed on 16 July 2098. Having 73 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including fees.