For those whose Hinckley home is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Chelsea 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Hinckley leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Nathan, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Hinckley. Having bought his property 18 years ago, the length of the lease was of no relevance. Fortunately, he realised he would imminently be paying an inflated amount for a lease extension. Nathan was able to extend his lease at the eleventh hour last January. Nathan and the freeholder via the management company subsequently settled on an amount of £5,500 . If the lease had dipped to less than eighty years, the amount would have increased by at least £900.
Last Summer we were phoned by Mr and Mrs. I Martin , who was assigned a lease of a newly refurbished apartment in Hinckley in March 1995. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by ninety years. Identical residencies in Hinckley with 100 year plus lease were valued about £275,000. The mid-range amount of ground rent was £55 collected annually. The lease ended in 2102. Considering the 76 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.
Last Autumn we were contacted by Dr Alisha Lee , who took over the lease of a recently refurbished flat in Hinckley in November 2012. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Identical flats in Hinckley with 100 year plus lease were valued about £176,200. The average ground rent payable was £65 collected yearly. The lease terminated on 12 June 2082. Taking into account 56 years outstanding we estimated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 exclusive of costs.