It’s an underpublicised certainty that a Hatton Park residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Hatton Park property prices.Where your lease has approximately 90 years left, you should 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 dips below eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Hatton Park will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Hatton Park with over 100 years left 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 upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with undertake Hatton Park 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 the wake of 6 months of unsuccessful negotiations with the freeholder of her first floor apartment in Hatton Park, Hannah initiated the lease extension process as the 80 year deadline was rapidly approaching. The lease extension completed in March 2005. The landlord’s costs were restricted to a tad over 600 pounds.
Dr S Roux bought a studio apartment in Hatton Park in March 2006. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Identical homes in Hatton Park with a long lease were valued around £261,600. The average ground rent payable was £60 invoiced every twelve months. The lease concluded on 5 October 2078. Given that there were 52 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £39,000 and £45,000 exclusive of expenses.
Last Spring we were e-mailed by Dr N Young , who purchased a basement flat in Hatton Park in April 2001. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Identical residencies in Hatton Park with a long lease were in the region of £218,000. The average ground rent payable was £45 billed per annum. The lease ran out in 2089. Given that there were 63 years outstanding we approximated the compensation to the landlord to extend the lease to be between £17,100 and £19,800 exclusive of costs.