The value of Hillsborough leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate materialy once the remaining term is below than eighty years
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with handle Hillsborough 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 conveyancing solicitor we work with provide it.
Trailing protracted discussions with the freeholder of her purpose-built flat in Hillsborough, Shannon started the lease extension process just as the lease was approaching the all-important eighty-year deadline. The lease extension was finalised in June 2005. The landlord’s charges were kept to an absolute minimum.
In 2013 we were called by Dr Leah Davies who, having acquired a one bedroom apartment in Hillsborough in June 2011. The dilemma was if we could approximate the price could be to extend the lease by ninety years. Comparable homes in Hillsborough with 100 year plus lease were in the region of £200,000. The average amount of ground rent was £50 collected annually. The lease lapsed in 2102. Taking into account 77 years unexpired we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 plus costs.
Last Autumn we were phoned by Mr and Mrs. D Stewart , who took over the lease of a ground floor flat in Hillsborough in November 2007. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Comparable properties in Hillsborough with a long lease were valued around £260,200. The average amount of ground rent was £65 invoiced annually. The lease end date was on 13 September 2091. Having 66 years left we approximated the premium to the landlord to extend the lease to be between £14,300 and £16,400 plus costs.