Holywell leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Most owners of residential leasehold property in Holywell enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Holywell you would be well advised to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Holywell 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.
Freddie was the the leasehold owner of a conversion flat in Holywell being sold with a lease of just over fifty eight years unexpired. Freddie informally spoke with his freeholder being 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 payable on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert advice and secured an acceptable resolution without resorting to tribunal and sell the flat.
Mr William Anderson was assigned a lease of a one bedroom apartment in Holywell in March 2008. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparative residencies in Holywell with an extended lease were valued around £171,800. The mid-range amount of ground rent was £55 collected monthly. The lease termination date was on 24 September 2076. Taking into account 50 years remaining we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 plus expenses.
Last Winter we were e-mailed by Mr and Mrs. N Cox , who completed a one bedroom apartment in Holywell in June 2005. The question was if we could estimate the price could be to extend the lease by 90 years. Comparative residencies in Holywell with 100 year plus lease were in the region of £280,000. The average ground rent payable was £45 invoiced annually. The lease elapsed in 2096. Given that there were 70 years left we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of legals.