Unfortunately that a Hayes residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Hayes property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining drops under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Hayes will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold residencies in Hayes with more than 100 years outstanding 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 premises. In such circumstances there is often little upside in purchasing the reversionary interest 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with handle Hayes 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.
Trailing unsuccessful negotiations with the landlord of her leasehold flat in Hayes, Melissa commenced the lease extension process as the eighty year mark was rapidly coming. The lease extension was finalised in January 2007. The freeholder’s costs were kept to an absolute minimum.
Ms W Hernández bought a newly refurbished flat in Hayes in March 1997. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative premises in Hayes with 100 year plus lease were worth £290,000. The mid-range ground rent payable was £45 collected yearly. The lease terminated in 2098. Having 73 years remaining we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Hayes premises is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case related to 2 flats. The unexpired lease term was 69 years.