Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Hook. Inevitably, the term of lease remaining shortens over time. This may slip by relatively unnoticed when the residence needs to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Qualifying long lease owners in Hook have the right to extend the lease for an additional 90 years under legislation. You should give due attention before putting off your Hook lease extension. Holding off the cost now only increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years in the future.
Lender | Requirement |
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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; |
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. |
Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Hook,the lease extension solicitors 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 Hook valuers.
In the wake of eight months of lengthy correspondence with the landlord of her basement apartment in Hook, Holly commenced the lease extension process just as her lease was nearing the all-important 80-year threshold. The transaction completed in March 2006. The freeholder’s costs were restricted to approximately 600 pounds.
In 2013 we were called by Dr N Simon who, having took over the lease of a ground floor flat in Hook in April 2004. The question was if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable flats in Hook with 100 year plus lease were worth £255,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease expired on 13 August 2095. Having 70 years remaining we approximated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 exclusive of fees.
An example of a Lease Extension decision for a Hook residence is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case related to 1 flat.