For anyone whose Hyde Park property is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
Leasehold properties in Hyde Park 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 home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Hyde Park leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful discussions with the freeholder of her first floor apartment in Hyde Park, Kayleigh initiated the lease extension process as the 80 year threshold was swiftly approaching. The transaction was concluded in March 2006. The landlord’s costs were kept to an absolute minimum.
Last Autumn we were phoned by Dr Jackson Pérez , who was assigned a lease of a ground floor flat in Hyde Park in October 1999. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable properties in Hyde Park with a long lease were valued about £250,000. The average amount of ground rent was £50 collected per annum. The lease termination date was on 11 August 2094. Considering the 69 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.
Last Autumn we were called by Dr Toby Lefèvre , who acquired a garden flat in Hyde Park in July 2000. We are asked if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Hyde Park with an extended lease were worth £290,000. The average ground rent payable was £60 invoiced annually. The lease expired in 2105. Given that there were 80 years unexpired we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.