It’s a harsh certainty that a Hainault residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Hainault property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Hainault will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally accepted that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Hainault 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 Joshua, started to get near to the eighty-year threshold with the lease on his basement apartment in Hainault. Having purchased his home 19 years ago, the unexpired term was of minimal concern. Thankfully, he realised he needed to take steps soon on a lease extension. Joshua was able to extend his lease just under the wire in April. Joshua and the freeholder via the managing agents in the end agreed on an amount of £5,500 . If the lease had dipped below eighty years, the price would have become more exhorbitant by a minimum £900.
In 2010 we were approached by Ms Georgina Johnson who, having acquired a ground floor apartment in Hainault in November 2007. The dilemma was if we could estimate the premium would likely be to prolong the lease by 90 years. Identical premises in Hainault with an extended lease were worth £198,800. The average ground rent payable was £55 invoiced per annum. The lease finished on 27 July 2079. Taking into account 55 years remaining we approximated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 not including expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Hainault premises is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case was in relation to 2 flats. The unexpired term was 69.26 years.