Hope leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Hope tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Hope you really ought to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Hope with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
The lawyers that we work with handle Hope 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 conveyancing solicitor we work with provide it.
Following protracted correspondence with the freeholder of her first floor apartment in Hope, Francesca commenced the lease extension process just as the lease was approaching the critical eighty-year threshold. The lease extension was finalised in May 2015. The freeholder’s fees were kept to an absolute minimum.
In 2010 we were contacted by Dr Alexandra Nelson who, having purchased a basement flat in Hope in June 2005. The dilemma was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Similar properties in Hope with an extended lease were in the region of £265,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease lapsed on 15 February 2099. Taking into account 73 years unexpired we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
In 2010 we were approached by Mr R Lee who, having moved into a first floor flat in Hope in June 2009. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Hope with an extended lease were valued about £264,000. The mid-range ground rent payable was £60 billed quarterly. The lease concluded on 6 January 2079. Considering the 53 years remaining we estimated the premium to the freeholder for the lease extension to be between £37,100 and £42,800 plus fees.