Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Hurworth. Clearly, the period of lease left shortens as time goes by. This is often overlooked and only becomes a problem when the residence has to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in Hurworth have the legal entitlement to extend the lease for an additional 90 years in accordance with legislation. You should give due attention before putting off your Hurworth lease extension. Holding off the cost now likely increases the price you will ultimately have to pay to extend your lease
Leasehold residencies in Hurworth with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle Hurworth 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 conveyancing solicitor we work with provide it.
During the course of the last few months Henry, came dangerously close to the eighty-year mark with the lease on his leasehold flat in Hurworth. Having purchased his flat two decades ago, the unexpired term was of no importance. Fortunately, he realised he would soon be paying an inflated amount for Extending the lease. Henry extended the lease just under the wire in June. Henry and the landlord in the end settled on an amount of £6,000 . If he failed to meet the deadline, the figure would have increased by at least £1,100.
Dr W Wood took over the lease of a garden apartment in Hurworth in May 2009. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by a further 90 years. Similar flats in Hurworth with 100 year plus lease were valued around £227,800. The mid-range ground rent payable was £45 invoiced monthly. The lease came to a finish in 2090. Considering the 65 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.
Last year we were e-mailed by Mr and Mrs. E Ali , who moved into a studio flat in Hurworth in February 2008. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Similar residencies in Hurworth with a long lease were worth £275,000. The average amount of ground rent was £55 collected quarterly. The lease elapsed on 13 March 2101. Given that there were 76 years remaining we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of legals.