Hellesdon leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Hellesdon residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Hellesdon you should check if your lease has between seventy and ninety years left. There are good reasons why a Hellesdon flat owner with a lease having around eighty years unexpired should take action to make sure that a lease extension is effected without delay
Leasehold residencies in Hellesdon with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Hellesdon leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jayden owned a studio flat in Hellesdon being sold with a lease of fraction over 72 years outstanding. Jayden on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jayden to exercise his statutory right. Jayden procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
Last month we were contacted by Mr M Brown , who acquired a first floor apartment in Hellesdon in November 1999. The question was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative flats in Hellesdon with an extended lease were valued around £203,200. The mid-range ground rent payable was £65 billed quarterly. The lease came to a finish in 2086. Having 61 years left we estimated the premium to the landlord for the lease extension to be between £19,000 and £22,000 plus fees.
Ms A Morgan completed a studio apartment in Hellesdon in October 2005. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar residencies in Hellesdon with a long lease were in the region of £260,000. The mid-range amount of ground rent was £50 collected quarterly. The lease came to a finish on 17 August 2097. Having 72 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.