It’s an underpublicised certainty that a Hawarden residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Hawarden property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under 80 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 leasehold owners in Hawarden will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
Engaging our service gives you increased control over the value of your Hawarden leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Hugo was the the leasehold proprietor of a studio flat in Hawarden on the market with a lease of a little over fifty eight years unexpired. Hugo informally approached his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be due on a lease extension were Hugo to invoke his statutory right. Hugo obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and readily saleable.
Last month we were contacted by Dr Eleanor Hernández , who completed a newly refurbished flat in Hawarden in April 1995. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical premises in Hawarden with 100 year plus lease were valued about £174,200. The average amount of ground rent was £55 invoiced yearly. The lease concluded on 14 March 2077. Considering the 51 years outstanding we estimated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of fees.
Mrs Shannon Bonnet bought a one bedroom apartment in Hawarden in May 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Identical flats in Hawarden with a long lease were worth £285,000. The average amount of ground rent was £45 collected yearly. The lease ended in 2097. Taking into account 71 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.