Unfortunately that a Holbrook residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Holbrook property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining drops below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Holbrook will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some situations you may not qualify. 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 conveyancing solicitor for the duration of the process.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Holbrook 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 conveyancing solicitor we work with provide it.
In recent months Seth, came precariously close to the 80-year mark with the lease on his first floor flat in Holbrook. Having bought his flat 18 years ago, the length of the lease was of no significance. Luckily, it dawned on him that he would soon be paying way over the odds for a lease extension. Seth arranged for a lease extension just in the nick of time last January. Seth and the landlord in the end settled on sum of £6,000 . If he failed to meet the deadline, the price would have increased by at least £925.
Dr W Wright completed a studio apartment in Holbrook in April 2011. The question was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Identical residencies in Holbrook with an extended lease were worth £264,000. The mid-range amount of ground rent was £60 invoiced annually. The lease elapsed in 2078. Considering the 53 years unexpired we approximated the premium to the freeholder to extend the lease to be between £37,100 and £42,800 not including costs.
Mr and Mrs. O Sánchez bought a newly refurbished flat in Holbrook in November 2003. The question was if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Identical flats in Holbrook with an extended lease were in the region of £220,400. The mid-range ground rent payable was £45 billed annually. The lease ran out on 7 February 2089. Given that there were 64 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £16,200 and £18,600 plus legals.