Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Heddon On The Wall. Inevitably, the length of lease left reduces over time. This is often overlooked and only raises itself as an issue when the flat or house needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Eligible leaseholders in Heddon On The Wall have the right to extend the lease for an additional 90 years under legislation. Please give due deliberation before putting off your Heddon On The Wall lease extension. Holding off that expense now simply increases the price you will ultimately incur for a lease extension
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
The conveyancing solicitors that we work with procure Heddon On The Wall 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 year Logan, came precariously near to the eighty-year threshold with the lease on his first floor apartment in Heddon On The Wall. Having purchased his property twenty years previously, the length of the lease was of minimal interest. Fortunately, he realised he needed to take steps soon on a lease extension. Logan arranged for a lease extension at the eleventh hour last January. Logan and the landlord who owned the flat above ultimately agreed on the final figure of £6,000 . If the lease had slipped lower than eighty years, the amount would have increased by a minimum £1,150.
In 2014 we were approached by Dr Jackson Murphy who, having moved into a purpose-built apartment in Heddon On The Wall in January 1997. The dilemma was if we could approximate the price would likely be to prolong the lease by ninety years. Identical residencies in Heddon On The Wall with 100 year plus lease were valued around £176,200. The mid-range amount of ground rent was £65 collected quarterly. The lease ran out in 2081. Taking into account 56 years left we approximated the compensation to the landlord for the lease extension to be within £29,500 and £34,000 exclusive of expenses.
Last Christmas we were e-mailed by Dr Ibrahim Khan , who moved into a purpose-built flat in Heddon On The Wall in January 1996. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Comparable premises in Heddon On The Wall with 100 year plus lease were in the region of £242,600. The average amount of ground rent was £45 invoiced monthly. The lease end date was on 12 February 2092. Considering the 67 years remaining we calculated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 not including costs.