For anyone whose Hull North property is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with handle Hull North 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 lawyer we work with provide it.
Last Spring Max, started to get close to the 80-year mark with the lease on his studio flat in Hull North. In buying his flat 19 years ago, the unexpired term was of no bearing. by good luck, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Max extended the lease just ahead of time last July. Max and the landlord ultimately settled on sum of £6,000 . If he had missed the deadline, the figure would have increased by at least £1,100.
In 2009 we were e-mailed by Mr and Mrs. M Bonnet who, having purchased a first floor apartment in Hull North in May 2004. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Identical flats in Hull North with a long lease were in the region of £275,000. The average ground rent payable was £55 invoiced quarterly. The lease concluded in 2103. Taking into account 77 years outstanding we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus fees.
In 2011 we were phoned by Mr and Mrs. H Ricardo who, having was assigned a lease of a one bedroom flat in Hull North in April 2011. The dilemma was if we could approximate the price could be to extend the lease by a further 90 years. Comparative flats in Hull North with an extended lease were in the region of £183,600. The mid-range amount of ground rent was £65 invoiced annually. The lease elapsed in 2083. Given that there were 57 years remaining we approximated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.