Hillsborough leases on residential deteriorating in value. Where your lease has in the region of 90 years left, you should start thinking about a lease extension. If lease term dips under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Hillsborough will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In some cases you may not be entitled. There are prescribed timetables and procedures to comply with once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure 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 conveyancer we work with provide it.
Mason owned a 2 bedroom flat in Hillsborough being marketed with a lease of fraction over 72 years left. Mason informally contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Mason to exercise his statutory right. Mason obtained expert advice and secured an acceptable resolution informally and readily saleable.
Last Christmas we were contacted by Ms V Gray , who was assigned a lease of a one bedroom apartment in Hillsborough in May 1996. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar premises in Hillsborough with 100 year plus lease were worth £174,200. The average ground rent payable was £55 billed yearly. The lease ran out on 17 April 2077. Considering the 51 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of costs.
Last Winter we were contacted by Dr F Patel , who bought a ground floor flat in Hillsborough in June 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by 90 years. Identical residencies in Hillsborough with an extended lease were worth £285,000. The average ground rent payable was £45 invoiced yearly. The lease came to a finish on 1 March 2097. Considering the 71 years unexpired we estimated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus legals.