For anyone whose Heath Hayes flat is held on a long lease, our message is clear – if no remedial action is taken, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Heath 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.
Ryan owned a 2 bedroom flat in Heath Hayes being marketed with a lease of a little over fifty eight years outstanding. Ryan on an informal basis approached his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Ryan to invoke his statutory right. Ryan procured expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Mr and Mrs. F Bailey owned a one bedroom flat in Heath Hayes in July 1998. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Similar residencies in Heath Hayes with 100 year plus lease were worth £191,400. The average ground rent payable was £55 invoiced per annum. The lease expired in 2080. Having 54 years unexpired we calculated the premium to the freeholder to extend the lease to be between £34,200 and £39,600 plus legals.
In 2013 we were contacted by Mr P David who, having purchased a one bedroom flat in Heath Hayes in August 2008. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative flats in Heath Hayes with a long lease were valued around £295,000. The mid-range ground rent payable was £45 collected yearly. The lease finished in 2100. Given that there were 74 years outstanding we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.