With a long leasehold property in Hermon, you are actually buying a right to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably when there are less than eighty years left. Anyone in Hermon with a lease nearing 81 years remaining should seriously think of extending it without delay. When a lease has under eighty years outstanding, under the current statute the landlord is entitled to calculate and charge a greater premium, based on a technical multiplication, known as “marriage value” which is payable.
Leasehold premises in Hermon with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth 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 maintenance charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Hermon 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.
Subsequent to lengthy discussions with the freeholder of her one bedroom apartment in Hermon, Jennifer started the lease extension process as the 80 year threshold was rapidly approaching. The transaction was finalised in June 2015. The landlord’s fees were restricted to about 600 pounds.
Last Christmas we were approach by Dr Francesca López , who purchased a newly refurbished flat in Hermon in May 2004. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative flats in Hermon with a long lease were in the region of £237,600. The average amount of ground rent was £45 invoiced per annum. The lease terminated in 2093. Having 67 years outstanding we approximated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 plus professional charges.
In 2012 we were approached by Ms R Lefebvre who, having owned a garden flat in Hermon in September 2010. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Similar flats in Hermon with an extended lease were worth £280,000. The mid-range amount of ground rent was £55 collected monthly. The lease came to a finish in 2104. Given that there were 78 years as a residual term we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus professional charges.