The basic rule is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Henlow may extend the lease for a further 90 years in accordance with Leasehold Reform legislation. Please give careful consideration before delaying your Henlow lease extension. Shelving that expense now simply escalates the premium you will eventually have to pay for a lease extension.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for decades to come.
| 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. |
| Birmingham Midshires | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Henlow 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.
Logan owned a studio apartment in Henlow on the market with a lease of just over 61 years left. Logan on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Logan to invoke his statutory right. Logan procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
In 2013 we were phoned by Mr and Mrs. I Rose who, having was assigned a lease of a one bedroom apartment in Henlow in July 1998. The dilemma was if we could estimate the price would be for a 90 year lease extension. Identical homes in Henlow with an extended lease were in the region of £295,000. The mid-range ground rent payable was £45 collected every twelve months. The lease ran out on 26 January 2100. Given that there were 74 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including fees.
In 2011 we were contacted by Mr and Mrs. K Morris who, having was assigned a lease of a one bedroom flat in Henlow in November 2001. The question was if we could approximate the premium could be to extend the lease by an additional years. Comparable premises in Henlow with an extended lease were worth £248,000. The average amount of ground rent was £65 collected quarterly. The lease ran out on 27 May 2089. Considering the 63 years as a residual term we estimated the premium to the landlord for the lease extension to be within £20,900 and £24,200 not including legals.