Hartburn leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Hartburn tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Hartburn you would be well advised to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you enhanced control over the value of your Hartburn leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Omar owned a high value flat in Hartburn on the market with a lease of fraction over sixty years outstanding. Omar on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Omar to invoke his statutory right. Omar obtained expert advice and secured an acceptable deal informally and sell the flat.
Ms S Nelson purchased a basement flat in Hartburn in May 2001. The dilemma was if we could approximate the premium could be to extend the lease by a further 90 years. Similar flats in Hartburn with an extended lease were in the region of £168,800. The average ground rent payable was £60 invoiced monthly. The lease expired on 26 September 2081. Taking into account 55 years as a residual term we calculated the premium to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of professional charges.
Last month we were called by Dr I Hall , who purchased a purpose-built apartment in Hartburn in September 1995. The dilemma was if we could approximate the premium would likely be to extend the lease by an additional years. Comparable properties in Hartburn with 100 year plus lease were valued around £235,200. The average ground rent payable was £45 invoiced monthly. The lease finished on 20 October 2092. Given that there were 66 years as a residual term we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 plus professional charges.