Hadley Wood leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Hadley Wood tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Hadley Wood you should investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Hadley Wood with in excess of one hundred years unexpired 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 upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Hadley Wood leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful negotiations with the freeholder of her first floor flat in Hadley Wood, Lauren started the lease extension process as the eighty year threshold was rapidly advancing. The lease extension was finalised in August 2008. The landlord’s charges were kept to an absolute minimum.
Ms G Bonnet purchased a purpose-built flat in Hadley Wood in September 2004. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Comparable premises in Hadley Wood with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £55 collected annually. The lease lapsed on 8 January 2101. Considering the 76 years outstanding we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.
An example of a Lease Extension matter before the tribunal for a Hadley Wood property is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case related to 1 flat. The unexpired residue of the current lease was 76 years.