For those whose Hale Barns flat is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Hale Barns 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 conveyancing solicitor we work with provide it.
Edward owned a 2 bedroom apartment in Hale Barns on the market with a lease of just over 61 years remaining. Edward informally spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Edward to invoke his statutory right. Edward procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2013 we were called by Mr R Mason who, having was assigned a lease of a one bedroom apartment in Hale Barns in October 1998. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Comparable premises in Hale Barns with an extended lease were in the region of £198,400. The average amount of ground rent was £65 invoiced yearly. The lease expiry date was in 2084. Taking into account 59 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of legals.
Mr S López purchased a recently refurbished flat in Hale Barns in September 1997. We are asked if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Comparable properties in Hale Barns with 100 year plus lease were worth £255,000. The average amount of ground rent was £50 billed every twelve months. The lease came to a finish on 25 March 2095. Taking into account 70 years left we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus professional charges.