Hitchin leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Hitchin tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Hitchin you really ought to check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Hitchin with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Hitchin 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.
Last year George, came seriously close to the 80-year threshold with the lease on his basement flat in Hitchin. Having bought his flat two decades ago, the lease term was of little significance. by good luck, he noticed he needed to take steps soon on a lease extension. George arranged for a lease extension at the eleventh hour in April. George and the freeholder via the managing agents in the end settled on sum of £5,500 . If the lease had fallen to less than 80 years, the amount would have become more exhorbitant by at least £1,150.
Mr and Mrs. R Rose completed a one bedroom apartment in Hitchin in March 2011. The dilemma was if we could estimate the premium could be to prolong the lease by a further 90 years. Comparative properties in Hitchin with an extended lease were in the region of £191,000. The average amount of ground rent was £65 invoiced per annum. The lease lapsed in 2083. Considering the 58 years remaining we estimated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 not including fees.
Dr I Hall owned a basement flat in Hitchin in July 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Identical premises in Hitchin with an extended lease were worth £250,000. The mid-range ground rent payable was £50 billed quarterly. The lease concluded on 17 October 2094. Having 69 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.