The basic rule is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Tower Hill have the right to extend the lease for a further 90 years in accordance with legislation. Please give careful consideration before delaying your Tower Hill lease extension. Postponing that expense now simply increases the price you will eventually be required to pay to extend the lease.
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence 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 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. |
| 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. |
| Yorkshire Building Society | 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. |
The lawyers that we work with procure Tower Hill 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 conveyancer we work with provide it.
Last October John, started to get close to the eighty-year mark with the lease on his two bedroom flat in Tower Hill. Having purchased his home two decades ago, the unexpired term was of little importance. As luck would have it, he realised he would soon be paying way over the odds for Extending the lease. John was able to extend his lease just under the wire last September. John and the landlord who owned the flat above in the end agreed on an amount of £5,500 . If he not met the deadline, the sum would have escalated by at least £900.
Mr Dexter Flores owned a first floor apartment in Tower Hill in January 2009. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Similar homes in Tower Hill with an extended lease were worth £280,000. The average amount of ground rent was £55 invoiced monthly. The lease expired on 5 April 2104. Having 79 years left we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including costs.
An example of a Freehold Enfranchisement case for a Tower Hill residence is 1-41 Royal Tower Lodge 40 Cartwright Street in April 2013. the tribunal adding the agreed value of capitalised ground rents and the reversion the price to be paid for the freehold was £1,187,000 This case affected 41 flats. The unexpired residue of the current lease was 107 years.