Unfortunately that a Hanham residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Hanham property prices.Once your lease nears 85ish years, you need to 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 below eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Hanham will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term 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 in the future.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Hanham 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.
Caleb was the the leasehold proprietor of a conversion flat in Hanham being marketed with a lease of fraction over sixty years left. Caleb informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Caleb to invoke his statutory right. Caleb obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2010 we were e-mailed by Dr V Fournier who, having bought a studio apartment in Hanham in June 2012. The question was if we could approximate the price would likely be to extend the lease by an additional years. Similar residencies in Hanham with an extended lease were in the region of £260,000. The average ground rent payable was £50 billed monthly. The lease terminated in 2098. Considering the 72 years outstanding we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including costs.
In 2012 we were e-mailed by Mr and Mrs. A Bonnet who, having took over the lease of a basement apartment in Hanham in August 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Comparative flats in Hanham with a long lease were valued about £261,600. The average ground rent payable was £60 collected quarterly. The lease expired in 2078. Taking into account 52 years outstanding we calculated the premium to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of expenses.