Hazlemere leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Hazlemere tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Hazlemere you should investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Hazlemere leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Hazlemere with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| 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. |
| 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. |
| 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 conveyancing solicitors that we work with procure Hazlemere 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.
Last Summer Jayden, came perilously close to the eighty-year threshold with the lease on his first floor flat in Hazlemere. In buying his flat twenty years previously, the lease term was of little interest. Fortunately, he realised he needed to take steps soon on a lease extension. Jayden extended the lease just under the wire in June. Jayden and the freeholder via the management company in the end agreed on sum of £5,500 . If the lease had slid to less than eighty years, the premium would have escalated by a minimum £950.
Mr and Mrs. J Leroy owned a one bedroom flat in Hazlemere in March 1995. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Comparative flats in Hazlemere with 100 year plus lease were worth £260,200. The average amount of ground rent was £65 billed per annum. The lease finished in 2092. Taking into account 66 years outstanding we estimated the premium to the landlord for the lease extension to be within £15,200 and £17,600 exclusive of costs.
Mrs C Hill purchased a basement flat in Hazlemere in February 2002. The dilemma was if we could estimate the price could be to prolong the lease by 90 years. Comparable residencies in Hazlemere with an extended lease were worth £198,800. The mid-range ground rent payable was £55 billed every twelve months. The lease terminated in 2081. Taking into account 55 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.