Owning a apartment usually means owning a lease of the property, which has a finite term of years. your lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Henllan. Inevitably, the length of lease remaining shortens over time. This may pass by relatively unnoticed when the property needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Qualifying leaseholders in Henllan have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. You should give careful attention before delaying your Henllan lease extension. Putting off that expense now only increases the price you will ultimately have to pay to extend your lease
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 additional ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with procure Henllan 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 conveyancing solicitor we work with provide it.
Finn owned a studio apartment in Henllan on the market with a lease of a little over 72 years outstanding. Finn on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Finn to invoke his statutory right. Finn procured expert advice and secured satisfactory resolution informally and sell the flat.
In 2011 we were phoned by Mr W Laurent who, having acquired a ground floor flat in Henllan in January 2003. The dilemma was if we could estimate the premium would likely be to extend the lease by 90 years. Comparative homes in Henllan with an extended lease were valued about £285,000. The mid-range amount of ground rent was £55 billed yearly. The lease ran out on 10 November 2105. Having 79 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.
In 2014 we were approached by Dr G Wilson who, having owned a one bedroom flat in Henllan in July 2004. The question was if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Identical flats in Henllan with a long lease were valued around £198,400. The mid-range amount of ground rent was £65 invoiced per annum. The lease came to a finish in 2085. Having 59 years left we estimated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of expenses.