For those whose Hope Valley flat is held on a long lease, the message is clear – if you ignore the situation, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
Leasehold properties in Hope Valley with more than one hundred years left on the lease are sometimes regarded as a ‘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 reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Hope Valley,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hope Valley valuers.
In 2014 Muhammad, came dangerously close to the 80-year threshold with the lease on his ground floor flat in Hope Valley. In buying his home 19 years previously, the length of the lease was of minimal concern. Fortunately, it dawned on him that he needed to take steps soon on a lease extension. Muhammad extended the lease at the eleventh hour in September. Muhammad and the landlord subsequently settled on sum of £5,000 . If he had missed the deadline, the amount would have escalated by at least £900.
Last Autumn we were approach by Mr and Mrs. T Davis , who moved into a garden apartment in Hope Valley in October 2005. The question was if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparable premises in Hope Valley with 100 year plus lease were valued around £233,200. The mid-range amount of ground rent was £60 collected every twelve months. The lease came to a finish in 2086. Having 61 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £22,800 and £26,400 not including legals.
Last year we were approach by Ms Jordan Patel , who purchased a basement flat in Hope Valley in March 2011. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Similar homes in Hope Valley with 100 year plus lease were worth £171,800. The mid-range amount of ground rent was £55 invoiced yearly. The lease finished in 2075. Having 50 years left we estimated the compensation to the landlord for the lease extension to be within £33,300 and £38,400 plus legals.