Hope residential property held on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
Leasehold premises in Hope with in excess of 100 years remaining 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 justify 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. |
| 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. |
| 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. |
Retaining our service gives you increased control over the value of your Hope leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of unsuccessful negotiations with the landlord of her purpose-built apartment in Hope, Charlotte commenced the lease extension process just as the lease was coming close to the critical 80-year mark. The legal work completed in July 2005. The landlord’s costs were negotiated to slightly above 650 pounds.
In 2014 we were phoned by Mr and Mrs. W Cooper who, having completed a purpose-built flat in Hope in July 2004. We are asked if we could approximate the price would be for a 90 year lease extension. Similar homes in Hope with an extended lease were in the region of £225,400. The average ground rent payable was £45 invoiced yearly. The lease ran out on 3 November 2089. Considering the 64 years left we calculated the premium to the landlord to extend the lease to be between £15,200 and £17,600 not including expenses.
In 2014 we were contacted by Mr U Díaz who, having completed a garden apartment in Hope in September 1995. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparable premises in Hope with a long lease were worth £270,000. The mid-range amount of ground rent was £55 billed per annum. The lease finished in 2100. Having 75 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.