Horncastle leases on residential properties are gradually losing 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 Horncastle tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Horncastle 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 cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Horncastle,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 Horncastle valuers.
In the wake of 9 months of protracted correspondence with the freeholder of her purpose-built apartment in Horncastle, Alice started the lease extension process as the 80 year deadline was rapidly approaching. The lease extension completed in September 2006. The landlord’s fees were restricted to below 450 pounds.
Last year we were approach by Mr and Mrs. G Wilson , who purchased a garden apartment in Horncastle in March 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparable flats in Horncastle with 100 year plus lease were valued around £260,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expired in 2099. Taking into account 73 years left we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including expenses.
Mr A Adams completed a first floor apartment in Horncastle in October 2005. The dilemma was if we could approximate the price would be for a ninety year lease extension. Identical properties in Horncastle with an extended lease were valued about £261,600. The average ground rent payable was £60 invoiced per annum. The lease finished on 3 June 2078. Considering the 52 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 plus expenses.