The re-sale value of a leasehold property in Hadley Wood is impacted by how many years the lease has remaining. If it is close to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that formalities can be concluded in advance of the 80 year cut off point. Leasehold Reform legislation entitles Hadley Wood qualifying lessees to an additional term of ninety years over and above the remaining term, at a nominal rent (no ground rent). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
The conveyancing solicitors that we work with undertake Hadley Wood 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.
Nathaniel was the the leasehold owner of a high value apartment in Hadley Wood on the market with a lease of a little over 72 years unexpired. Nathaniel on an informal basis contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Nathaniel to exercise his statutory right. Nathaniel procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Last Summer we were contacted by Dr Emily Ali , who moved into a purpose-built apartment in Hadley Wood in July 1999. The dilemma was if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Similar properties in Hadley Wood with a long lease were in the region of £280,000. The average amount of ground rent was £55 billed quarterly. The lease ran out on 16 January 2103. Given that there were 78 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus costs.
An example of a Lease Extension matter before the tribunal for a Hadley Wood flat 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 affected 1 flat. The remaining number of years on the lease was 76 years.