Halifax leases on residential deteriorating in value. if your lease has approximately ninety years remaining, you should start considering the need for a lease extension. Eighty years is a significant number: when the remaining term of a lease drops below this level then you start paying an additional element called marriage value. Flat owners in Halifax will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancer to confirm if you qualify. In certain situations you may not qualify. There are prescribed deadlines and steps to comply with once the process has started so it’s best to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
The conveyancing solicitors that we work with handle Halifax 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 conveyancer we work with provide it.
Max was the the leasehold owner of a studio flat in Halifax being sold with a lease of a few days over 59 years outstanding. Max informally contacted his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Max to invoke his statutory right. Max procured expert advice and secured satisfactory resolution informally and ending up with a market value flat.
Last Winter we were approach by Ms Rachel Bertrand , who moved into a one bedroom apartment in Halifax in March 2007. The question was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparable properties in Halifax with a long lease were worth £250,400. The average amount of ground rent was £65 collected per annum. The lease concluded on 25 May 2090. Given that there were 64 years remaining we estimated the premium to the landlord to extend the lease to be within £19,000 and £22,000 not including fees.
In 2010 we were e-mailed by Mr and Mrs. U Peterson who, having purchased a recently refurbished flat in Halifax in February 1995. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparative residencies in Halifax with 100 year plus lease were in the region of £189,000. The mid-range ground rent payable was £55 billed yearly. The lease concluded in 2079. Having 53 years outstanding we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus fees.