The market value of a leasehold property in Hull is impacted by how long the lease has left to run. If it is close to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be finalised ahead of the 80 year mark. Current legislation entitles Hull qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 Hull can be a difficult process. We recommend you secure professional help from a conveyancer 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 Hull lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After protracted correspondence with the landlord of her basement flat in Hull, Sophie started the lease extension process as the eighty year deadline was fast coming. The transaction was concluded in January 2011. The landlord’s fees were kept to an absolute minimum.
Last Summer we were approach by Dr Sophie Sánchez , who purchased a purpose-built apartment in Hull in September 2005. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Similar homes in Hull with 100 year plus lease were worth £189,000. The mid-range amount of ground rent was £55 collected annually. The lease ran out on 23 April 2078. Taking into account 53 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of professional charges.
Last Autumn we were phoned by Mr M Khan , who took over the lease of a studio flat in Hull in February 1996. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Identical premises in Hull with 100 year plus lease were valued about £290,000. The average ground rent payable was £45 invoiced per annum. The lease end date was in 2098. Considering the 73 years unexpired we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of expenses.