Henbury leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Henbury residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Henbury you really ought to see if your lease has between seventy and ninety years left. There are compelling reasons why a Henbury leaseholder with a lease having around 80 years remaining should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Henbury with over one hundred years remaining on the lease are sometimes referred to as ‘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 to be gained by 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle 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.
After unsuccessful negotiations with the freeholder of her basement apartment in Henbury, Ella started the lease extension process just as her lease was approaching the all-important eighty-year mark. The lease extension was concluded in April 2008. The landlord’s fees were kept to an absolute minimum.
In 2011 we were phoned by Mrs Natalie Hall who, having completed a basement flat in Henbury in March 1995. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparable residencies in Henbury with an extended lease were valued about £290,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease concluded on 19 June 2097. Taking into account 72 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of professional charges.
Mrs Bethan Martin purchased a first floor flat in Henbury in September 2001. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Identical properties in Henbury with an extended lease were valued around £233,200. The average ground rent payable was £60 collected annually. The lease concluded in 2086. Considering the 61 years remaining we estimated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus professional charges.