Hurworth leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Hurworth residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Hurworth you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Hurworth with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit 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 are not acceptable. 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; |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Hurworth can be a difficult process. We recommend you secure guidance from a lawyer and surveyor with experience in this area.
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 in-depth market knowledge dealing with Hurworth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Ollie, started to get near to the 80-year threshold with the lease on his one bedroom flat in Hurworth. In buying his flat two decades ago, the lease term was of minimal relevance. by good luck, he noticed he would soon be paying way over the odds for a lease extension. Ollie was able to extend his lease at the eleventh hour in September. Ollie and the freeholder via the managing agents subsequently agreed on sum of £6,000 . If he failed to meet the deadline, the premium would have increased by at least £1,075.
In 2009 we were e-mailed by Dr D King who, having took over the lease of a one bedroom flat in Hurworth in November 2008. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Similar premises in Hurworth with an extended lease were worth £285,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease end date was in 2105. Taking into account 79 years outstanding we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including legals.
In 2013 we were contacted by Mr Ben Dupont who, having completed a purpose-built apartment in Hurworth in May 1998. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Identical premises in Hurworth with an extended lease were in the region of £193,400. The average amount of ground rent was £65 collected quarterly. The lease expired in 2085. Having 59 years left we approximated the premium to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of professional charges.