Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Hightown. Inevitably, the period of lease remaining reduces over time. This may pass by relatively unnoticed when the flat or house has to be disposed of or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Hightown have the legal entitlement to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Please give careful consideration before delaying your Hightown lease extension. Holding off the cost now likely increases the price you will ultimately incur for a lease extension
Leasehold premises in Hightown with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Hightown leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Alex was the the leasehold owner of a conversion apartment in Hightown being sold with a lease of a few days over sixty years outstanding. Alex informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Alex to invoke his statutory right. Alex procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
Last Summer we were contacted by Ms Jade Johnson , who moved into a garden apartment in Hightown in January 1998. The question was if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Comparable homes in Hightown with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease terminated on 6 June 2099. Having 73 years left we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
Last Autumn we were phoned by Mr Ollie Johnson , who took over the lease of a first floor apartment in Hightown in May 2010. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Identical properties in Hightown with 100 year plus lease were worth £264,000. The average ground rent payable was £60 invoiced annually. The lease concluded in 2079. Given that there were 53 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £37,100 and £42,800 exclusive of legals.