Unfortunately that a Holsworthy 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 early years due to the depreciation being disguised by increases in the Holsworthy property prices.Once your lease nears 85ish years, you should start considering 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 slips under eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Holsworthy will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| Chelsea Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Regardless of whether you are a tenant or a freeholder in Holsworthy,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Holsworthy valuers.
Michael owned a studio apartment in Holsworthy on the market with a lease of a little over 61 years unexpired. Michael on an informal basis contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of 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 Michael to invoke his statutory right. Michael obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Dr V Harris bought a ground floor flat in Holsworthy in February 2004. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Comparable premises in Holsworthy with a long lease were worth £256,600. The average ground rent payable was £60 billed every twelve months. The lease elapsed in 2077. Given that there were 52 years outstanding we estimated the premium to the freeholder to extend the lease to be within £41,800 and £48,400 not including legals.
Dr V Lewis was assigned a lease of a first floor apartment in Holsworthy in July 1995. The question was if we could estimate the premium would likely be for a 90 year lease extension. Comparative homes in Holsworthy with 100 year plus lease were in the region of £218,000. The mid-range amount of ground rent was £45 collected annually. The lease ran out on 15 September 2088. Taking into account 63 years outstanding we calculated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 plus fees.