Hayle leases on residential deteriorating in value. Where your lease has about ninety years remaining, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then have to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Hayle will usually qualify for a lease extension; however a solicitor will confirm your eligibility. In some situations you may not be entitled. There are prescribed timetables and formalities to comply with once the process is triggered so it’s prudent to be guided by a conveyancer during the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | 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. |
| 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. |
| 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 conveyancers that we work with procure Hayle 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 lawyer we work with provide it.
Subsequent to protracted discussions with the landlord of her one bedroom apartment in Hayle, Katherine started the lease extension process just as her lease was coming close to the crucial 80-year mark. The legal work was concluded in October 2012. The landlord’s charges were restricted to under 700 GBP.
In 2009 we were called by Dr Jodie Bell who, having completed a first floor apartment in Hayle in August 1999. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Comparative premises in Hayle with an extended lease were valued about £210,600. The average amount of ground rent was £45 collected annually. The lease elapsed in 2088. Considering the 62 years remaining we approximated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 plus professional charges.
Last month we were called by Ms L Stewart , who bought a newly refurbished flat in Hayle in April 2002. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar homes in Hayle with an extended lease were valued around £265,000. The mid-range amount of ground rent was £50 collected monthly. The lease came to a finish in 2099. Given that there were 73 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.