The rule of thumb is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Hilton have the legal entitlement to extend the lease for an additional ninety years under Leasehold Reform legislation. Do think carefully before delaying your Hilton lease extension. Postponing that expense today simply increases the price you will eventually be required to pay for a lease extension.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | 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 |
| 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 Hilton leasehold, as your property will be more valuable and marketable 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.
Oscar was the the leasehold owner of a 2 bedroom apartment in Hilton being marketed with a lease of just over 59 years left. Oscar informally spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Oscar to invoke his statutory right. Oscar obtained expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr and Mrs. D Kelly moved into a one bedroom flat in Hilton in July 1995. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar flats in Hilton with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 collected monthly. The lease terminated in 2097. Having 71 years remaining we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.
Mr Sebastian Brown was assigned a lease of a one bedroom apartment in Hilton in July 1996. We are asked if we could approximate the premium would be for a ninety year lease extension. Similar premises in Hilton with 100 year plus lease were worth £254,200. The mid-range amount of ground rent was £60 collected quarterly. The lease lapsed on 2 May 2077. Given that there were 51 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £43,700 and £50,600 exclusive of expenses.