Hermitage leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Most owners of residential leasehold property in Hermitage enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Hermitage you really ought to see if your lease has between 70 and 90 years left. There are good reasons why a Hermitage flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is effected without delay
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years in the future.
| 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 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Lease extensions in Hermitage can be a difficult process. We recommend you get guidance from a conveyancer and surveyor 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 procuring Hermitage lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Aarav, started to get close to the 80-year threshold with the lease on his studio apartment in Hermitage. Having bought his flat 19 years previously, the unexpired term was of little relevance. by good luck, he became aware that he needed to take action soon on a lease extension. Aarav was able to extend his lease at the eleventh hour in January. Aarav and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If he had missed the deadline, the figure would have increased by at least £1,000.
Dr Lydia Morris took over the lease of a one bedroom flat in Hermitage in March 2000. The question was if we could estimate the premium would be for a ninety year extension to my lease. Comparable properties in Hermitage with an extended lease were worth £210,000. The mid-range ground rent payable was £50 collected yearly. The lease ran out in 2105. Having 80 years outstanding we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.
In 2011 we were approached by Dr Erin Thompson who, having moved into a first floor apartment in Hermitage in September 2002. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical residencies in Hermitage with an extended lease were valued around £275,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease came to a finish on 10 March 2094. Considering the 69 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus legals.