For anyone whose Hermitage property is held on a long lease, our message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 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 |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
Retaining our service will provide you enhanced control over the value of your Hermitage leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Alfie was the the leasehold owner of a 2 bedroom flat in Hermitage being marketed with a lease of fraction over 72 years remaining. Alfie informally approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. No ground rent would be payable on a lease extension were Alfie to invoke his statutory right. Alfie obtained expert advice and was able to make a more informed judgement and deal with the matter and sell the flat.
In 2009 we were called by Dr O Gómez who, having bought a one bedroom flat in Hermitage in January 2008. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Similar flats in Hermitage with a long lease were worth £233,200. The average amount of ground rent was £60 billed yearly. The lease terminated in 2087. Given that there were 61 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £22,800 and £26,400 exclusive of legals.
Mr Blake Gray moved into a first floor apartment in Hermitage in May 2000. We are asked if we could estimate the premium could be to extend the lease by an additional years. Comparative premises in Hermitage with a long lease were in the region of £166,800. The average amount of ground rent was £50 invoiced quarterly. The lease elapsed on 14 May 2076. Having 50 years outstanding we calculated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 plus costs.