Holmrook leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Holmrook tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Holmrook you should investigate if your lease has between seventy and 90 years left. There are compelling reasons why a Holmrook flat owner with a lease having around 80 years left should take steps to ensure that a lease extension is effected without delay
Leasehold properties in Holmrook with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
Retaining our service will provide you enhanced control over the value of your Holmrook leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Mason was the the leasehold owner of a 2 bedroom flat in Holmrook on the market with a lease of a little over 59 years unexpired. Mason informally approached his freeholder a well known London-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Mason to invoke his statutory right. Mason procured expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Last Spring we were e-mailed by Mrs Paige Moreau , who completed a recently refurbished apartment in Holmrook in January 2012. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparable flats in Holmrook with an extended lease were in the region of £206,200. The average ground rent payable was £60 collected annually. The lease termination date was on 26 April 2081. Given that there were 56 years remaining we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus legals.
Last month we were approach by Dr Harrison Kelly , who took over the lease of a basement apartment in Holmrook in May 2003. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Comparable homes in Holmrook with an extended lease were worth £300,000. The average amount of ground rent was £50 invoiced every twelve months. The lease lapsed on 20 August 2101. Given that there were 76 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of legals.