There is no doubt about it a leasehold property in Hyde is a wasting asset as a result of the diminishing lease term. If the residual term has, in excess of 100 years to run then this decrease may be fractional that being said there will become a point in time when a lease has under than 80 years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should extend the lease without delay. Most flat owners in Hyde will qualify for this right; nevertheless a conveyancing solicitor can advise if you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you better control over the value of your Hyde leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Mason, started to get close to the 80-year threshold with the lease on his two bedroom flat in Hyde. In buying his flat two decades ago, the lease term was of minimal significance. As luck would have it, he recognised he would soon be paying an inflated amount for a lease extension. Mason extended the lease just under the wire in May. Mason and the landlord who owned the flat above ultimately settled on sum of £5,000 . If he had missed the deadline, the figure would have become more exhorbitant by a minimum £850.
Dr C Gunderson bought a studio flat in Hyde in February 2010. The question was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Similar homes in Hyde with an extended lease were worth £184,000. The average ground rent payable was £55 invoiced yearly. The lease finished on 16 April 2079. Having 53 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 not including professional charges.
In 2014 we were phoned by Mr R Patel who, having moved into a one bedroom apartment in Hyde in April 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by ninety years. Comparable premises in Hyde with 100 year plus lease were valued about £290,000. The average amount of ground rent was £45 billed every twelve months. The lease ended in 2099. Given that there were 73 years outstanding we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus professional charges.