Top reasons for Hermitage lease extension

Top reasons for lease extension now:

A Hermitage lease depreciates with the years remaining on the lease.

With a residential leasehold premises in Hermitage, you effectively rent it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially when there are less than 80 years left. Residents in Hermitage with a lease drawing near to 81 years unexpired should seriously think of extending it without delay. When the lease term has under eighty years remaining, under the relevant statute the landlord can calculate and demand a larger premium, based on a technical computation, strangely termed as “marriage value” which is due.

An extended lease has roughly the same value as a freehold

Leasehold premises in Hermitage with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.

Lenders may not loan monies with a short lease

The propensity since the credit crunch has been for banks to tighten lending requirements across the board - this has extended to the property over which the mortgage is to be charged. This has meant the minimum number of years remaining under the lease required by banks has increased. In the past lenders would grant a mortgage on a lease with twenty years plus the term of the loan - routinely 50 year leases but those requirements evolved by the requirement for longer and longer leases - many use a minimum term of 75 years as a prerequisite.

Get in touch with one of our Hermitage lease extension solicitors or enfranchisement solicitors

Engaging our service will provide you enhanced control over the value of your Hermitage leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.

Hermitage Lease Extension Example Cases:

Arthur, Hermitage, Berkshire

Last year Arthur, started to get near to the eighty-year mark with the lease on his studio apartment in Hermitage. In buying his flat 19 years previously, the unexpired term was of little relevance. Luckily, he realised he would imminently be paying an inflated amount for Extending the lease. Arthur was able to extend his lease at the eleventh hour in September. Arthur and the freeholder ultimately settled on a premium of £5,500 . If the lease had dropped to less than 80 years, the amount would have gone up by a minimum £1,100.

Hermitage case:

Dr P Simon purchased a first floor apartment in Hermitage in September 2000. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Identical premises in Hermitage with 100 year plus lease were valued around £198,800. The average ground rent payable was £55 invoiced monthly. The lease end date was on 6 October 2081. Given that there were 55 years as a residual term we estimated the premium to the landlord for the lease extension to be within £33,300 and £38,400 plus costs.

Hermitage case:

In 2014 we were approached by Ms U Lewis who, having took over the lease of a first floor apartment in Hermitage in November 2003. The question was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Similar flats in Hermitage with a long lease were valued about £295,000. The mid-range ground rent payable was £50 invoiced monthly. The lease termination date was in 2101. Having 75 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus legals.