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 becomes 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 should investigate if your lease has between seventy and 90 years left. There are compelling reasons why a Henbury flat owner with a lease having around eighty years left should take action to ensure that a lease extension is put in place without delay
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Henbury,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Henbury valuers.
Eli was the the leasehold owner of a 2 bedroom flat in Henbury on the market with a lease of a few days over 61 years outstanding. Eli informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Eli to invoke his statutory right. Eli obtained expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Christmas we were e-mailed by Dr Stephanie Clarke , who owned a one bedroom flat in Henbury in October 1998. The dilemma was if we could estimate the premium would likely be to prolong the lease by 90 years. Comparable premises in Henbury with a long lease were in the region of £248,000. The mid-range ground rent payable was £65 collected annually. The lease lapsed on 18 February 2088. Taking into account 63 years remaining we approximated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 plus legals.
Last October we were called by Mr and Mrs. J Rogers , who acquired a ground floor apartment in Henbury in October 2001. The question was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical flats in Henbury with an extended lease were valued around £181,600. The average ground rent payable was £55 invoiced quarterly. The lease finished in 2077. Having 52 years left we approximated the premium to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of professional charges.