Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your 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 Hayle. Clearly, the period of lease left shortens as time goes by. This may slip by relatively unnoticed when the residence has to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Qualifying long lease owners in Hayle have the right to extend the lease for an additional ninety years in accordance with legislation. Please give due deliberation before putting off your Hayle lease extension. Putting off the cost now only increases the price you will eventually have to pay to extend your lease
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Hayle leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Muhammad, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Hayle. In buying his home 18 years ago, the length of the lease was of minimal concern. Fortunately, he realised he needed to take steps soon on Extending the lease. Muhammad extended the lease just ahead of time in March. Muhammad and the freeholder via the management company in the end agreed on the final figure of £5,500 . If he failed to meet the deadline, the premium would have increased by a minimum £975.
Last Christmas we were e-mailed by Ms Natasha Smith , who acquired a one bedroom apartment in Hayle in August 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Similar flats in Hayle with a long lease were in the region of £250,000. The average amount of ground rent was £50 billed per annum. The lease expired on 14 June 2095. Having 69 years outstanding we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2012 we were called by Mr and Mrs. P Garcia who, having moved into a purpose-built flat in Hayle in June 2006. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparable flats in Hayle with a long lease were valued around £285,000. The average ground rent payable was £55 billed yearly. The lease ended in 2106. Having 80 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including expenses.