Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Hampstead. Inevitably, the term of lease remaining reduces over time. This may pass by relatively unnoticed when the flat or house has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible leaseholders in Hampstead have the legal entitlement to extend the lease for a further 90 years under statute. Do give careful attention before delaying your Hampstead lease extension. Holding off that expense now only increases the price you will eventually have to pay for a lease extension
Leasehold premises in Hampstead with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 conveyancing solicitor we work with provide it.
In recent months Ethan, started to get near to the eighty-year mark with the lease on his first floor apartment in Hampstead. Having bought his property twenty years previously, the lease term was of minimal concern. Fortunately, he recognised he would soon be paying way over the odds for a lease extension. Ethan extended the lease at the eleventh hour last August. Ethan and the landlord in the end agreed on sum of £5,000 . If he not met the deadline, the price would have become more costly by at least £850.
Mr Omar Cox bought a one bedroom flat in Hampstead in June 2004. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Similar flats in Hampstead with an extended lease were valued about £245,000. The mid-range amount of ground rent was £50 billed monthly. The lease came to a finish on 12 April 2093. Considering the 68 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
An example of a Lease Extension case for a Hampstead flat 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 was in relation to 2 flats. The unexpired residue of the current lease was 16.83 and 16.43.