It’s an underpublicised certainty that a Hampton residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Hampton property market.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 dips under 80 years - otherwise a higher amount will be payable. The majority of flat owners in Hampton will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
Leasehold residencies in Hampton with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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:
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The conveyancing solicitors that we work with undertake Hampton 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.
Eliot was the the leasehold owner of a conversion flat in Hampton on the market with a lease of a little over fifty eight years outstanding. Eliot informally approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be payable on a lease extension were Eliot to invoke his statutory right. Eliot procured expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last month we were e-mailed by Mr Henry Nelson , who was assigned a lease of a one bedroom flat in Hampton in August 2002. We are asked if we could approximate the premium would likely be to prolong the lease by 90 years. Comparable flats in Hampton with an extended lease were worth £193,400. The average ground rent payable was £65 billed per annum. The lease expiry date was on 20 July 2085. Considering the 59 years remaining we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 not including costs.
An example of a Lease Extension matter before the tribunal for a Hampton premises is 147 Redford Close in June 2012. The Tribunal determined the lease extension premium to be at £4,200 This case related to 1 flat. The remaining number of years on the lease was 82.93 years.