Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Hounslow. Clearly, the period of lease remaining shortens over time. This may slip by relatively unnoticed when the property needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Hounslow have the right to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. You should give due deliberation before delaying your Hounslow lease extension. Putting off the cost now only increases the price you will eventually incur for a lease extension
Leasehold premises in Hounslow with over one hundred years outstanding 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 situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Engaging our service gives you enhanced control over the value of your Hounslow leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Isaac owned a 2 bedroom flat in Hounslow on the market with a lease of just over 59 years remaining. Isaac on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Isaac to invoke his statutory right. Isaac obtained expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
In 2009 we were contacted by Dr Finley Vincent who, having acquired a one bedroom flat in Hounslow in June 2000. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical flats in Hounslow with an extended lease were worth £260,000. The average ground rent payable was £50 collected per annum. The lease came to a finish on 26 October 2096. Given that there were 71 years remaining we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
An example of a Lease Extension matter before the tribunal for a Hounslow premises is Ground Floor Flat 91 Bath Road in May 2009. in a case where the freeholder could not be traced, the Brentford County Court ordered that the Lease be surrendered in return for the grant of a new lease of the Premises at a premium determined by the Leasehold Valuation Tribunal. The tribunal concluded that the price payable by the Applicant for the new lease of the premises be £15,900 This case related to 1 flat. The unexpired lease term was 60.45 years.