Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Hatch and Old Basing. Clearly, the term of lease remaining shortens over time. This may slip by relatively unnoticed when the flat or house needs to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Qualifying leaseholders in Hatch and Old Basing have the right to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Please give careful attention before putting off your Hatch and Old Basing lease extension. Putting off that expense now likely increases the price you will eventually have to pay to extend your lease
Leasehold residencies in Hatch and Old Basing with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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; |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The lawyers that we work with procure Hatch and Old Basing 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 conveyancing solicitor we work with provide it.
In recent months Oscar, started to get close to the 80-year mark with the lease on his two bedroom flat in Hatch and Old Basing. In buying his flat 18 years previously, the length of the lease was of little bearing. by good luck, he noticed he would soon be paying an inflated amount for a lease extension. Oscar arranged for a lease extension at the eleventh hour in April. Oscar and the landlord ultimately agreed on sum of £6,000 . If the lease had dipped to less than eighty years, the sum would have become more costly by at least £975.
Mr and Mrs. Y Kelly took over the lease of a studio apartment in Hatch and Old Basing in March 2011. The question was if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Similar residencies in Hatch and Old Basing with 100 year plus lease were in the region of £290,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease elapsed on 20 September 2105. Considering the 80 years left we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including costs.
Last Christmas we were approach by Mr Lewis Davis , who took over the lease of a ground floor apartment in Hatch and Old Basing in May 2003. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Similar properties in Hatch and Old Basing with 100 year plus lease were worth £200,800. The average amount of ground rent was £65 collected monthly. The lease expired on 5 August 2085. Taking into account 60 years outstanding we calculated the premium to the freeholder to extend the lease to be between £20,900 and £24,200 exclusive of fees.