It’s an underpublicised truth that a Howden residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Howden property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be due. The majority of flat owners in Howden will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is generally considered 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 residence will be worth the same as a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Lease extensions in Howden can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Howden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Freddie, came critically close to the eighty-year mark with the lease on his basement flat in Howden. Having bought his home two decades ago, the length of the lease was of little importance. Fortunately, he noticed he would soon be paying an escalated premium for a lease extension. Freddie was able to extend his lease just under the wire last January. Freddie and the landlord subsequently settled on the final figure of £6,000 . If the lease had dropped below eighty years, the sum would have become more exhorbitant by at least £850.
Dr T Lee owned a one bedroom flat in Howden in February 2001. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Identical homes in Howden with an extended lease were valued around £270,000. The average amount of ground rent was £55 billed per annum. The lease termination date was in 2101. Taking into account 76 years left we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.
In 2012 we were contacted by Mr and Mrs. D André who, having took over the lease of a purpose-built apartment in Howden in June 2010. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Similar premises in Howden with 100 year plus lease were in the region of £176,200. The mid-range ground rent payable was £65 billed per annum. The lease expired in 2081. Given that there were 56 years unexpired we calculated the compensation to the landlord to extend the lease to be between £29,500 and £34,000 not including fees.