Unfortunately that a Hanworth residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Hanworth property prices.Where your lease has approximately 90 years left, 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 falls under eighty years - otherwise a higher premium will be payable. Most leasehold owners in Hanworth will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Hanworth with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
Retaining our service gives you enhanced control over the value of your Hanworth leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Connor owned a high value flat in Hanworth being marketed with a lease of fraction over 59 years remaining. Connor on an informal basis contacted his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Connor to invoke his statutory right. Connor obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2013 we were approached by Mr and Mrs. E Hill who, having bought a recently refurbished apartment in Hanworth in January 2007. The question was if we could approximate the price would be to extend the lease by 90 years. Comparative flats in Hanworth with 100 year plus lease were worth £200,000. The mid-range ground rent payable was £50 billed yearly. The lease ran out on 15 March 2102. Given that there were 77 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Hanworth residence is 147 Redford Close in June 2012. The Tribunal determined the lease extension premium to be at £4,200 This case was in relation to 1 flat. The unexpired term as at the valuation date was 82.93 years.