The value of Heathfield leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate significantly once the unexpired lease term is less than eighty years
Leasehold premises in Heathfield with over 100 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 situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Heathfield,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Heathfield valuers.
Last year Kai, started to get near to the 80-year threshold with the lease on his ground floor flat in Heathfield. Having bought his flat two decades ago, the lease term was of minimal importance. Thankfully, he recognised he needed to take action soon on Extending the lease. Kai extended the lease at the eleventh hour in May. Kai and the freeholder subsequently agreed on the final figure of £5,500 . If the lease had dropped below eighty years, the price would have gone up by a minimum £1,100.
In 2009 we were contacted by Dr Finn Clark who, having owned a ground floor apartment in Heathfield in September 1996. The dilemma was if we could approximate the premium would be to prolong the lease by a further 90 years. Comparable flats in Heathfield with a long lease were in the region of £265,000. The average amount of ground rent was £50 collected quarterly. The lease terminated on 4 March 2099. Having 74 years unexpired we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.
Mr and Mrs. N Mercier bought a one bedroom apartment in Heathfield in February 1997. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Identical residencies in Heathfield with an extended lease were valued around £264,000. The average ground rent payable was £60 billed per annum. The lease ended in 2078. Considering the 53 years outstanding we estimated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of expenses.