Unfortunately that a Hurst residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Hurst property prices.Where your lease has approximately 90 years left, you should 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 falls under 80 years - otherwise a higher premium will be due. The majority of flat owners in Hurst will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Hurst,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 experience and the close ties they enjoy with Hurst valuers.
Ibrahim owned a high value flat in Hurst being sold with a lease of a little over 72 years remaining. Ibrahim on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ibrahim to invoke his statutory right. Ibrahim procured expert legal guidance and was able to make an informed judgement and handle with the matter and sell the property.
Mr and Mrs. N Collins moved into a purpose-built flat in Hurst in July 2001. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable premises in Hurst with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease finished in 2097. Considering the 71 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of legals.
Last month we were e-mailed by Dr Caleb Campbell , who took over the lease of a studio flat in Hurst in July 2002. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by ninety years. Comparative properties in Hurst with a long lease were valued about £225,800. The average amount of ground rent was £60 billed quarterly. The lease concluded in 2086. Taking into account 60 years left we calculated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 not including professional charges.