Hermon leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Hermon tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Hermon you really ought to see if your lease has between seventy and 90 years left. There are good reasons why a Hermon flat owner with a lease having around eighty years unexpired should take steps to ensure that a lease extension is put in place without delay
Leasehold properties in Hermon with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Hermon can be a difficult process. We recommend you procure professional help from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Hermon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Trailing lengthy discussions with the landlord of her ground floor flat in Hermon, Sophie initiated the lease extension process just as the lease was nearing the all-important eighty-year deadline. The legal work was concluded in May 2007. The landlord’s fees were restricted to a tad over 450 pounds.
Last Autumn we were e-mailed by Dr Tyler Roux , who completed a purpose-built flat in Hermon in July 2005. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Comparable flats in Hermon with 100 year plus lease were valued about £260,000. The average ground rent payable was £50 invoiced quarterly. The lease terminated on 7 June 2098. Having 72 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.
Mr and Mrs. O Alexander acquired a garden apartment in Hermon in October 2004. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable residencies in Hermon with a long lease were worth £256,600. The average amount of ground rent was £60 invoiced every twelve months. The lease expired on 12 October 2078. Considering the 52 years remaining we calculated the premium to the landlord to extend the lease to be within £39,000 and £45,000 plus fees.