If you are facing a significant premium because your lease in Handforth has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
A Handforth leasehold property depreciates with the years remaining on the lease.
When it comes to long leasehold premises in Handforth, you are actually buying a right to reside in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly especially once there are fewer than eighty years left. Anyone in Handforth with a lease drawing near to 81 years remaining should seriously consider extending it without delay. Once the lease term has below eighty years remaining, under the current Act the landlord is entitled to calculate and charge a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
An extended lease is almost the same value as a freehold
Leasehold premises in Handforth with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
Banks and Building Societies may decide not to grant a mortgage with a short lease
Mortgage lenders are less likely to issue a mortgage on a domestic property in Handforth with a short lease. Some lenders simply refuse a mortgage on leases with less than 75 years left.
| Lender |
Requirement
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|---|
| Bank of Scotland |
Minimum 70 years from the date of the mortgage.
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| 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.
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| 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
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| TSB |
Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Why use us for your lease extension in Handforth?
Regardless of whether you are a tenant or a landlord in Handforth,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Handforth valuers.
Handforth Lease Extension Example Cases:
Omar, Handforth, Cheshire
In 2014 Omar, started to get near to the eighty-year threshold with the lease on his leasehold flat in Handforth. In buying his flat two decades ago, the length of the lease was of minimal significance. by good luck, he noticed he needed to take steps soon on Extending the lease. Omar extended the lease just in the nick of time last June. Omar and the freeholder subsequently settled on a premium of £6,000 . If the lease had fallen to less than eighty years, the sum would have become more exhorbitant by a minimum £875.
Handforth case:
In 2012 we were approached by Dr Aiden Anderson who, having completed a purpose-built apartment in Handforth in January 1996. The question was if we could estimate the price would likely be to prolong the lease by a further 90 years. Similar premises in Handforth with 100 year plus lease were worth £280,000. The average amount of ground rent was £45 collected annually. The lease concluded on 16 January 2095. Given that there were 69 years left we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus costs.
Handforth case:
Last January we were contacted by Mr E Mason , who
was assigned a lease of a purpose-built apartment in Handforth in April 2003. The question was if we could approximate the premium would be to prolong the lease by 90 years. Identical flats in Handforth with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 billed monthly. The lease termination date was on 7 November 2084. Having 58 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of costs.