Houghton Regis leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Houghton Regis tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Houghton Regis you should investigate if your lease has between seventy and ninety years left. 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 conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Lloyds TSB Scotland | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you increased control over the value of your Houghton Regis leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Toby was the the leasehold proprietor of a high value apartment in Houghton Regis on the market with a lease of a little over sixty years unexpired. Toby on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Toby to exercise his statutory right. Toby procured expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Mr D Martínez completed a garden apartment in Houghton Regis in April 1998. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparative flats in Houghton Regis with a long lease were valued around £280,000. The average ground rent payable was £45 billed every twelve months. The lease concluded on 25 March 2094. Considering the 69 years unexpired we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus expenses.
Last Spring we were e-mailed by Ms Phoebe Garcia , who acquired a one bedroom flat in Houghton Regis in April 1996. The question was if we could approximate the premium could be to extend the lease by 90 years. Comparable flats in Houghton Regis with a long lease were worth £216,000. The mid-range ground rent payable was £60 collected per annum. The lease elapsed on 21 January 2083. Taking into account 58 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.