It’s a harsh truth that a Hermon residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Hermon property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Hermon will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Hermon with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Retaining our service gives you enhanced control over the value of your Hermon leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Ollie, started to get close to the eighty-year threshold with the lease on his leasehold apartment in Hermon. In buying his home 18 years ago, the length of the lease was of no interest. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Ollie was able to extend his lease at the eleventh hour in May. Ollie and the landlord who owned the flat above subsequently settled on the final figure of £5,500 . If the lease had gone below 80 years, the sum would have become more costly by at least £1,025.
Mr and Mrs. V Rodríguez bought a one bedroom apartment in Hermon in August 2006. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by an additional years. Identical properties in Hermon with a long lease were valued about £264,000. The average amount of ground rent was £60 collected every twelve months. The lease finished in 2078. Taking into account 53 years outstanding we approximated the premium to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of professional charges.
In 2013 we were e-mailed by Dr Mason Ricardo who, having was assigned a lease of a one bedroom apartment in Hermon in January 2002. The dilemma was if we could estimate the price would likely be to extend the lease by an additional years. Comparative residencies in Hermon with 100 year plus lease were valued about £220,400. The average ground rent payable was £45 billed annually. The lease concluded in 2089. Having 64 years outstanding we calculated the compensation to the landlord to extend the lease to be within £16,200 and £18,600 exclusive of fees.