Unfortunately that a Histon residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Histon property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Histon will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with handle Histon 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.
Following unsuccessful correspondence with the freeholder of her two bedroom apartment in Histon, Isabelle initiated the lease extension process just as her lease was coming close to the all-important eighty-year mark. The legal work was concluded in April 2009. The freeholder’s charges were kept to an absolute minimum.
In 2012 we were approached by Mr and Mrs. O Leroy who, having took over the lease of a recently refurbished apartment in Histon in May 2012. We are asked if we could estimate the price could be to extend the lease by an additional years. Identical residencies in Histon with a long lease were worth £218,000. The mid-range ground rent payable was £45 collected annually. The lease terminated on 2 July 2088. Taking into account 63 years remaining we approximated the premium to the landlord to extend the lease to be between £17,100 and £19,800 exclusive of professional charges.
Last Autumn we were phoned by Mr H Gray , who acquired a basement apartment in Histon in March 1996. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Similar properties in Histon with 100 year plus lease were valued about £265,000. The average amount of ground rent was £50 collected per annum. The lease came to a finish on 4 March 2099. Given that there were 74 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.