Unfortunately that a Halkyn residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Halkyn property prices.Once your lease nears 85ish years, you should 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 slips under 80 years - otherwise a higher premium will be payable. Most flat owners in Halkyn will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Halkyn,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Halkyn valuers.
Harry owned a studio apartment in Halkyn on the market with a lease of a little over 72 years left. Harry on an informal basis approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harry to invoke his statutory right. Harry obtained expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Last March we were contacted by Mr and Mrs. P Petit , who purchased a garden flat in Halkyn in September 2003. The question was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparable properties in Halkyn with a long lease were valued around £285,000. The average ground rent payable was £45 billed every twelve months. The lease concluded in 2098. Given that there were 72 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.
Mr and Mrs. G White completed a ground floor apartment in Halkyn in November 2004. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparable homes in Halkyn with an extended lease were valued about £233,200. The average ground rent payable was £60 collected annually. The lease expired in 2087. Given that there were 61 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £22,800 and £26,400 exclusive of costs.