It’s an underpublicised certainty that a Hedge End residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Hedge End property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher premium will be payable. Most flat owners in Hedge End will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Hedge End 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.
After protracted discussions with the freeholder of her two bedroom apartment in Hedge End, Lauren commenced the lease extension process as the 80 year deadline was quickly advancing. The transaction was concluded in February 2011. The freeholder’s charges were kept to an absolute minimum.
Mr and Mrs. U Norbert completed a one bedroom flat in Hedge End in July 2007. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by 90 years. Comparable properties in Hedge End with 100 year plus lease were worth £173,800. The average ground rent payable was £60 invoiced quarterly. The lease lapsed in 2081. Considering the 55 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 not including legals.
In 2010 we were contacted by Mr and Mrs. Y Rogers who, having moved into a one bedroom apartment in Hedge End in May 2000. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparable residencies in Hedge End with a long lease were valued about £235,200. The average amount of ground rent was £45 billed every twelve months. The lease finished in 2092. Considering the 66 years unexpired we approximated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including fees.