It’s an underpublicised truth that a Hednesford residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Hednesford property prices.Once your lease gets to 85ish years, 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 dips under 80 years - otherwise a higher premium will be due. Most leasehold owners in Hednesford will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated 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 unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 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 |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Hednesford,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Hednesford valuers.
Last Christmas Riley, came very close to the 80-year mark with the lease on his purpose- built flat in Hednesford. Having bought his home two decades ago, the length of the lease was of little concern. Thankfully, he recognised he needed to take action soon on a lease extension. Riley arranged for a lease extension just ahead of time in July. Riley and the freeholder subsequently agreed on the final figure of £5,000 . If he failed to meet the deadline, the amount would have escalated by a minimum £1,150.
Mr V Mitchell was assigned a lease of a studio flat in Hednesford in July 1997. The question was if we could estimate the premium could be for a ninety year lease extension. Comparative residencies in Hednesford with an extended lease were valued around £235,200. The mid-range ground rent payable was £45 billed quarterly. The lease finished on 4 August 2092. Having 66 years left we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus legals.
Mr and Mrs. C Howard completed a one bedroom apartment in Hednesford in April 2001. The dilemma was if we could estimate the premium could be for a ninety year lease extension. Comparative properties in Hednesford with a long lease were valued about £275,000. The average amount of ground rent was £55 collected monthly. The lease finished on 10 June 2103. Having 77 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus legals.