It’s a harsh certainty that a Handforth residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Handforth property prices.Where your lease has approximately ninety years left, you should 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 falls below 80 years - otherwise a higher amount will be payable. Most flat owners in Handforth will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some cases you may not qualify. 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 conveyancing solicitor for the duration of the process.
Leasehold residencies in Handforth with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Handforth 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.
James owned a studio flat in Handforth being sold with a lease of just over 59 years remaining. James on an informal basis spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were James to invoke his statutory right. James procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2013 we were phoned by Dr M Kelly who, having purchased a garden flat in Handforth in February 2009. The question was if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Identical properties in Handforth with 100 year plus lease were valued about £205,000. The average ground rent payable was £50 billed yearly. The lease lapsed on 6 January 2103. Taking into account 79 years unexpired we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.
Last Winter we were e-mailed by Dr U Nguyen , who purchased a one bedroom flat in Handforth in May 2003. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year extension to my lease. Similar homes in Handforth with 100 year plus lease were in the region of £275,000. The mid-range amount of ground rent was £65 collected quarterly. The lease concluded on 24 November 2092. Having 68 years outstanding we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus fees.