On the balance of probabilities if you own a flat in Hockley Heath you actually own a long leasehold interest over your property
Leasehold premises in Hockley Heath with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Hockley Heath 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 lawyer we work with provide it.
Trailing lengthy correspondence with the landlord of her one bedroom flat in Hockley Heath, Sophie initiated the lease extension process just as her lease was approaching the critical eighty-year threshold. The lease extension completed in March 2015. The freeholder’s charges were negotiated to slightly above 550 pounds.
In 2014 we were phoned by Dr Ollie Garcia who, having owned a purpose-built flat in Hockley Heath in April 2010. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Hockley Heath with an extended lease were worth £260,000. The average ground rent payable was £50 collected annually. The lease ran out on 5 May 2097. Given that there were 72 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.
Last Spring we were approach by Mr and Mrs. G Rivera , who completed a one bedroom flat in Hockley Heath in August 2000. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Similar residencies in Hockley Heath with a long lease were worth £261,600. The mid-range amount of ground rent was £60 invoiced per annum. The lease terminated on 17 September 2077. Given that there were 52 years unexpired we estimated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 exclusive of professional charges.