Hermitage leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Hermitage tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Hermitage you should check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Hermitage with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Barclays plc | |
| Coventry Building Society | |
| Santander | |
| Skipton Building Society |
The conveyancers that we work with procure Hermitage 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 lawyer we work with provide it.
Mason was the the leasehold proprietor of a high value flat in Hermitage being marketed with a lease of fraction over sixty years left. Mason informally spoke with his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Mason to invoke his statutory right. Mason obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last October we were e-mailed by Mrs N Peterson , who moved into a ground floor apartment in Hermitage in September 2007. We are asked if we could estimate the price could be for a 90 year lease extension. Similar homes in Hermitage with an extended lease were valued about £280,000. The mid-range amount of ground rent was £45 collected annually. The lease expired in 2096. Having 70 years unexpired we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus professional charges.
Last Spring we were approach by Mr V Petit , who bought a garden apartment in Hermitage in July 1999. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative premises in Hermitage with 100 year plus lease were in the region of £223,400. The mid-range ground rent payable was £60 collected annually. The lease elapsed on 2 March 2085. Given that there were 59 years remaining we calculated the premium to the landlord for the lease extension to be between £27,600 and £31,800 not including fees.