The closer a residential lease in Hampstead gets to zero years unexpired, the the greater the reduction in the value of the property. If the residual term has, over 125 years remaining then this decrease may be fractional nevertheless there will become a stage when a lease has fewer than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. Many flat owners in Hampstead will qualify for this right; that being said a lawyer will be able to advise whether you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold premises in Hampstead with more than 100 years left on the lease are sometimes referred to as ‘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 upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 undertake Hampstead 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 lawyer we work with provide it.
Dexter owned a conversion flat in Hampstead on the market with a lease of just over 59 years remaining. Dexter on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 yearly. No ground rent would be due on a lease extension were Dexter to exercise his statutory right. Dexter obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the flat.
In 2011 we were e-mailed by Dr S Sánchez who, having took over the lease of a one bedroom flat in Hampstead in June 2002. The question was if we could approximate the price would be to extend the lease by ninety years. Similar homes in Hampstead with a long lease were valued around £270,000. The average ground rent payable was £55 billed per annum. The lease expiry date was on 12 March 2101. Having 75 years outstanding we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.
An example of a Lease Extension matter before the tribunal for a Hampstead residence is Raised Ground Floor Flat 20 Fitzjohns Avenue in July 2014. the Tribunal decided that the premiums to be paid for new leases in respect of the Raised Ground Floor Flat and the First Floor Flat were to be calculated as: Raised Ground Floor: £765,175.14 First Floor: £601,617.77 This case related to 2 flats. The unexpired residue of the current lease was 16.83 and 16.43.