Unfortunately that a Hartburn residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. 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 Hartburn property market.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining slips under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Hartburn will be able to extend under the legislation; however a lawyer should be able to confirm 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 is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold properties in Hartburn with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service will provide you better control over the value of your Hartburn leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy correspondence with the freeholder of her purpose-built flat in Hartburn, Kate commenced the lease extension process as the 80 year mark was quickly advancing. The transaction was finalised in March 2013. The landlord’s costs were kept to an absolute minimum.
Last Autumn we were phoned by Mr and Mrs. K Hernández , who took over the lease of a first floor apartment in Hartburn in April 2003. The dilemma was if we could shed any light on how much (approximately) price would likely be to extend the lease by an additional years. Comparative properties in Hartburn with an extended lease were valued around £200,800. The average amount of ground rent was £65 billed every twelve months. The lease concluded in 2086. Taking into account 60 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 not including costs.
In 2012 we were phoned by Ms Y Morgan who, having owned a garden apartment in Hartburn in April 2007. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Identical homes in Hartburn with a long lease were worth £255,000. The mid-range amount of ground rent was £50 collected quarterly. The lease finished in 2097. Given that there were 71 years unexpired we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of legals.