With a domestic leasehold premises in Hinckley, you are actually buying an entitlement to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater notably once there are less than 80 years remaining. Residents in Hinckley with a lease nearing 81 years unexpired should seriously consider extending it as soon as possible. When the lease term has below 80 years left, under the current Act the freeholder is entitled to calculate and levy a greater amount, based on a technical multiplication, known as “marriage value” which is due.
Leasehold properties in Hinckley with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in Hinckley,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Hinckley valuers.
In recent months Stanley, started to get near to the 80-year mark with the lease on his first floor apartment in Hinckley. Having bought his flat 19 years ago, the length of the lease was of no relevance. Fortunately, it dawned on him that he would soon be paying way over the odds for a lease extension. Stanley arranged for a lease extension at the eleventh hour in March. Stanley and the freeholder eventually agreed on a premium of £5,500 . If he not met the deadline, the sum would have escalated by a minimum £850.
In 2013 we were approached by Mr and Mrs. G Bennett who, having completed a studio flat in Hinckley in May 2009. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Comparative properties in Hinckley with 100 year plus lease were valued about £235,200. The mid-range ground rent payable was £45 collected quarterly. The lease expired in 2091. Having 66 years remaining we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 plus costs.
Last Autumn we were contacted by Mr and Mrs. K Martin , who was assigned a lease of a one bedroom apartment in Hinckley in October 2009. The dilemma was if we could estimate the price would be to prolong the lease by a further 90 years. Similar residencies in Hinckley with 100 year plus lease were valued around £275,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease lapsed on 3 September 2102. Given that there were 77 years left we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including professional charges.