Unfortunately that a Henbury residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Henbury property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term dips below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Henbury 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 deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 conveyancing solicitors that we work with procure Henbury 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.
Adam owned a 2 bedroom flat in Henbury being sold with a lease of just over 59 years unexpired. Adam informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Adam to invoke his statutory right. Adam obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
In 2010 we were phoned by Mrs Natasha Bailey who, having owned a recently refurbished flat in Henbury in April 2009. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Comparable properties in Henbury with 100 year plus lease were worth £174,200. The average amount of ground rent was £55 collected per annum. The lease concluded in 2077. Having 51 years left we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including expenses.
Last Christmas we were contacted by Dr G Norbert , who owned a purpose-built flat in Henbury in October 2000. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative premises in Henbury with a long lease were in the region of £280,000. The average ground rent payable was £45 invoiced monthly. The lease elapsed in 2097. Taking into account 71 years left we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of expenses.