Unfortunately that a Halifax residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Halifax property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Halifax will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Halifax with more than one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
Lender | Requirement |
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Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
Leeds Building Society | 85 years remaining from the start of the mortgage. |
National Westminster Bank | Mortgage term plus 30 years. |
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. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your Halifax 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.
Last October Jasper, came seriously close to the 80-year threshold with the lease on his basement apartment in Halifax. In buying his home two decades ago, the lease term was of minimal importance. by good luck, he became aware that he needed to take action soon on a lease extension. Jasper extended the lease at the eleventh hour in August. Jasper and the landlord who owned the flat above ultimately agreed on an amount of £5,500 . If the lease had fallen below eighty years, the sum would have increased by at least £1,100.
Dr G Morgan owned a purpose-built flat in Halifax in July 2006. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable premises in Halifax with a long lease were worth £198,800. The average amount of ground rent was £55 collected quarterly. The lease finished in 2080. Having 55 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 not including professional charges.
Last month we were contacted by Mrs Freya Sharif , who purchased a purpose-built apartment in Halifax in August 2011. We are asked if we could shed any light on how much (approximately) price would be to extend the lease by ninety years. Similar residencies in Halifax with 100 year plus lease were valued about £295,000. The average amount of ground rent was £50 collected per annum. The lease ran out on 5 March 2100. Given that there were 75 years left we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.