It’s a harsh truth that a Hampton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Hampton property market.Once your lease gets to 85ish years, 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 below eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Hampton will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Hampton with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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. |
| 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; |
| Chelsea Building Society | 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. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Retaining our service will provide you better control over the value of your Hampton leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
14 months ago Caleb, came precariously near to the eighty-year threshold with the lease on his studio flat in Hampton. In buying his property two decades ago, the length of the lease was of little bearing. As luck would have it, he noticed he needed to take action soon on a lease extension. Caleb extended the lease just under the wire last April. Caleb and the freeholder via the management company ultimately agreed on a premium of £5,500 . If he not met the deadline, the amount would have escalated by at least £1,100.
Mr and Mrs. B Davis owned a garden flat in Hampton in July 1995. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative homes in Hampton with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 invoiced annually. The lease terminated in 2101. Having 76 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.
An example of a Lease Extension case for a Hampton premises is 147 Redford Close in June 2012. The Tribunal determined the lease extension premium to be at £4,200 This case was in relation to 1 flat. The unexpired term as at the valuation date was 82.93 years.