For those whose Hartburn property is held on a long lease, our message is clear – if no remedial action is taken, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
It is generally accepted that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Hartburn can be a difficult process. We recommend you get professional help from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Hartburn lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Luke was the the leasehold owner of a 2 bedroom flat in Hartburn being sold with a lease of fraction over 72 years left. Luke on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Luke to invoke his statutory right. Luke procured expert advice and secured satisfactory deal without resorting to tribunal and readily saleable.
Last Spring we were called by Ms Chelsea Taylor , who completed a first floor flat in Hartburn in October 2010. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Similar premises in Hartburn with 100 year plus lease were worth £227,800. The average ground rent payable was £45 collected yearly. The lease came to a finish in 2091. Given that there were 65 years remaining we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including expenses.
Dr G Laurent was assigned a lease of a purpose-built flat in Hartburn in February 2001. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Comparative residencies in Hartburn with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £55 collected quarterly. The lease elapsed in 2102. Taking into account 76 years unexpired we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.