Hermitage residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Lease extensions in Hermitage can be a difficult process. We recommend you get guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Hermitage lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 9 months of unsuccessful correspondence with the freeholder of her basement apartment in Hermitage, Leah started the lease extension process as the 80 year threshold was fast coming. The lease extension was concluded in August 2011. The landlord’s fees were negotiated to approximately 550 pounds.
Dr W Gunderson purchased a basement flat in Hermitage in May 1995. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable properties in Hermitage with a long lease were worth £240,600. The mid-range ground rent payable was £60 billed quarterly. The lease finished on 1 February 2088. Considering the 62 years unexpired we estimated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 plus legals.
Dr Aarav White was assigned a lease of a studio apartment in Hermitage in April 2007. The question was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Similar residencies in Hermitage with an extended lease were worth £174,200. The average amount of ground rent was £55 collected quarterly. The lease termination date was in 2077. Taking into account 51 years outstanding we approximated the premium to the landlord for the lease extension to be between £31,400 and £36,200 not including costs.