Hyde Park leases on residential properties are gradually losing value. Where your lease has about ninety years left, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease dips below this level then you begin paying an additional element called marriage value. Flat owners in Hyde Park will usually qualify for a lease extension; however a solicitor should be able confirm if you qualify. In certain cases you may not be entitled. There are also strict deadlines and steps to comply with once the process has started so it’s best to be guided by a lawyer during the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent 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 ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Hyde Park 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 lawyer we work with provide it.
Sebastian was the the leasehold owner of a 2 bedroom apartment in Hyde Park on the market with a lease of a little over sixty years unexpired. Sebastian on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Sebastian to invoke his statutory right. Sebastian procured expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Last Autumn we were e-mailed by Mrs Jessica Ramírez , who completed a newly refurbished flat in Hyde Park in September 2006. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Comparative flats in Hyde Park with a long lease were valued around £193,400. The mid-range amount of ground rent was £65 collected monthly. The lease finished on 4 April 2085. Having 59 years left we estimated the premium to the landlord for the lease extension to be within £21,900 and £25,200 plus fees.
In 2010 we were phoned by Mr and Mrs. N Campbell who, having owned a one bedroom flat in Hyde Park in September 1995. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Comparable flats in Hyde Park with 100 year plus lease were worth £255,000. The average amount of ground rent was £50 collected annually. The lease finished in 2096. Having 70 years outstanding we calculated the premium to the freeholder to extend the lease to be between £10,500 and £12,000 exclusive of fees.