For those whose Henleaze flat is held on a long lease, the message is clear – if you ignore the situation, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Henleaze 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 conveyancer we work with provide it.
18 months ago Jayden, started to get near to the eighty-year mark with the lease on his basement flat in Henleaze. In buying his property 19 years previously, the length of the lease was of minimal relevance. Luckily, he realised he needed to take steps soon on a lease extension. Jayden extended the lease just ahead of time last September. Jayden and the freeholder ultimately settled on an amount of £5,500 . If the lease had descended below eighty years, the premium would have escalated by a minimum £925.
In 2012 we were called by Dr Leah Thompson who, having completed a first floor apartment in Henleaze in September 2003. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Henleaze with 100 year plus lease were in the region of £248,000. The average ground rent payable was £65 billed yearly. The lease finished in 2088. Given that there were 63 years remaining we estimated the compensation to the landlord to extend the lease to be within £20,000 and £23,000 not including expenses.
In 2012 we were phoned by Mr and Mrs. I Moore who, having owned a recently refurbished apartment in Henleaze in February 1998. The dilemma was if we could approximate the premium could be to extend the lease by 90 years. Comparative residencies in Henleaze with a long lease were valued around £181,600. The mid-range ground rent payable was £55 invoiced quarterly. The lease ran out in 2077. Given that there were 52 years unexpired we estimated the premium to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of costs.