The market value of a leasehold property in Hayle is impacted by how long the lease has left to run. If it is close to or fewer than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that formalities can be finalised in advance of the 80 year mark. Statute enables Hayle qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Hayle with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Hayle,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Hayle valuers.
Leon owned a studio apartment in Hayle being sold with a lease of a few days over sixty years left. Leon informally approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Leon to exercise his statutory right. Leon obtained expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2009 we were called by Ms Chelsea Alexander who, having moved into a purpose-built apartment in Hayle in April 2008. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Identical homes in Hayle with a long lease were in the region of £261,600. The mid-range amount of ground rent was £60 billed per annum. The lease expired on 10 May 2077. Taking into account 52 years left we approximated the compensation to the freeholder for the lease extension to be between £39,000 and £45,000 exclusive of costs.
In 2013 we were phoned by Mr and Mrs. H Rivera who, having moved into a studio apartment in Hayle in February 1999. We are asked if we could estimate the price could be to prolong the lease by an additional years. Similar properties in Hayle with a long lease were valued about £218,000. The mid-range ground rent payable was £45 collected quarterly. The lease ended in 2088. Considering the 63 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 exclusive of professional charges.