With a residential leasehold property in Hanham, you are actually buying an entitlement to reside in a property for a set period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are fewer than eighty years remaining. Residents in Hanham with a lease approaching 81 years left should seriously think of extending it sooner rather than later. When a lease has under 80 years remaining, under the relevant legislation the freeholder can calculate and demand a greater premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold properties in Hanham with more than one hundred years remaining on the lease are often 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 to be gained by purchasing the freehold unless savings on ground rent and service charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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 |
The conveyancers that we work with handle 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.
Following unsuccessful negotiations with the landlord of her leasehold apartment in Hanham, Rhiannon initiated the lease extension process just as the lease was approaching the critical 80-year threshold. The transaction was concluded in March 2006. The freeholder’s charges were restricted to under 650 pounds.
Mrs B Mitchell purchased a garden flat in Hanham in January 1995. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar properties in Hanham with a long lease were valued around £218,000. The average amount of ground rent was £45 billed annually. The lease ended in 2088. Taking into account 63 years unexpired we calculated the premium to the landlord for the lease extension to be within £17,100 and £19,800 not including expenses.
Last Winter we were contacted by Dr Hollie Wright , who moved into a studio apartment in Hanham in October 2007. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable homes in Hanham with a long lease were worth £265,000. The mid-range amount of ground rent was £50 collected quarterly. The lease finished in 2098. Taking into account 73 years remaining we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of fees.