When it comes to long leasehold premises in Hull East, you are actually buying a right to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are less than 80 years remaining. Leasehold owners in Hull East with a lease drawing near to 81 years unexpired should seriously consider extending it sooner as opposed to later. When a lease has under 80 years remaining, under the current statute the freeholder is entitled to calculate and demand a greater amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold premises in Hull East with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Hull East,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hull East valuers.
Last October Max, started to get close to the eighty-year mark with the lease on his first floor flat in Hull East. Having bought his flat two decades ago, the length of the lease was of minimal importance. Fortunately, he recognised he would imminently be paying an inflated amount for Extending the lease. Max arranged for a lease extension just ahead of time in May. Max and the landlord who owned the flat above ultimately agreed on the final figure of £6,000 . If the lease had descended lower than eighty years, the amount would have become more exhorbitant by at least £925.
In 2012 we were approached by Mr and Mrs. F Lewis who, having purchased a newly refurbished apartment in Hull East in February 1997. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Identical properties in Hull East with a long lease were valued about £168,800. The average amount of ground rent was £60 collected yearly. The lease terminated on 28 August 2081. Taking into account 55 years left we approximated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 not including fees.
In 2011 we were e-mailed by Mr Benjamin James who, having took over the lease of a ground floor apartment in Hull East in February 2009. The question was if we could approximate the premium could be for a 90 year extension to my lease. Identical properties in Hull East with a long lease were in the region of £232,800. The mid-range amount of ground rent was £45 invoiced annually. The lease finished on 17 July 2091. Having 65 years left we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.