Hotwells leases on residential deteriorating in value. Where your lease has in the region of 90 years remaining, you should start thinking about a lease extension. If lease term falls under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Hotwells will mostly be legally entitled to a lease extension; however a solicitor should be able confirm your eligibility. In some situations you may not qualify. There are prescribed deadlines and formalities to comply with once the process has started so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold properties in Hotwells with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Hotwells 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.
David owned a conversion apartment in Hotwells on the market with a lease of a few days over fifty eight years remaining. David informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were David to invoke his statutory right. David procured expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2013 we were approached by Mr and Mrs. L Torres who, having was assigned a lease of a studio apartment in Hotwells in May 2008. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Identical properties in Hotwells with 100 year plus lease were worth £208,600. The average amount of ground rent was £60 billed monthly. The lease expired on 13 August 2083. Having 57 years remaining we approximated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus legals.
In 2014 we were phoned by Mr A Anderson who, having owned a one bedroom flat in Hotwells in May 1998. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Similar residencies in Hotwells with 100 year plus lease were in the region of £200,000. The average ground rent payable was £50 collected quarterly. The lease ran out in 2103. Considering the 77 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.