The re-sale value of a leasehold property in Hermitage depends on how long the lease has left to run. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that formalities can be finalised ahead of the 80 year mark. Current legislation entitles Hermitage qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Hermitage 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 lawyer we work with provide it.
In 2014 Jack, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Hermitage. In buying his flat two decades ago, the length of the lease was of little interest. Fortunately, he noticed he would soon be paying way over the odds for Extending the lease. Jack was able to extend his lease just ahead of time in June. Jack and the landlord who owned the flat above subsequently agreed on the final figure of £6,000 . If he not met the deadline, the figure would have increased by a minimum £925.
In 2012 we were phoned by Dr M James who, having completed a basement apartment in Hermitage in August 2011. We are asked if we could estimate the price would be for a ninety year lease extension. Comparative residencies in Hermitage with a long lease were worth £225,800. The mid-range ground rent payable was £60 billed every twelve months. The lease lapsed on 7 April 2085. Taking into account 60 years remaining we estimated the premium to the freeholder to extend the lease to be within £23,800 and £27,400 not including fees.
Mr G Phillips bought a one bedroom flat in Hermitage in April 2012. The dilemma was if we could approximate the premium would likely be to extend the lease by ninety years. Comparative residencies in Hermitage with 100 year plus lease were valued about £210,000. The mid-range ground rent payable was £50 invoiced yearly. The lease finished in 2105. Given that there were 80 years unexpired we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus expenses.