Hale Barns leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Hale Barns residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Hale Barns you must see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Hale Barns with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Hale Barns,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hale Barns valuers.
Subsequent to protracted negotiations with the freeholder of her one bedroom apartment in Hale Barns, Lily commenced the lease extension process as the 80 year deadline was quickly nearing. The lease extension completed in May 2009. The landlord’s fees were kept to an absolute minimum.
Mr and Mrs. I Cooper bought a ground floor apartment in Hale Barns in September 2001. The dilemma was if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Comparative premises in Hale Barns with an extended lease were valued about £264,000. The average ground rent payable was £60 collected yearly. The lease lapsed in 2077. Taking into account 53 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £37,100 and £42,800 exclusive of costs.
In 2011 we were phoned by Mr and Mrs. H Bertrand who, having completed a one bedroom apartment in Hale Barns in August 2011. We are asked if we could approximate the premium could be to prolong the lease by an additional years. Identical flats in Hale Barns with an extended lease were valued around £218,000. The mid-range amount of ground rent was £45 collected per annum. The lease concluded on 11 January 2087. Having 63 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £17,100 and £19,800 not including fees.