Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Hessle. Clearly, the length of lease remaining reduces over time. This may slip by relatively unnoticed when the property needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension. Qualifying long lease owners in Hessle have the right to extend the lease for an additional ninety years in accordance with Leasehold Reform legislation. Please give due deliberation before delaying your Hessle lease extension. Holding off that expense now only increases the price you will ultimately have to pay for a lease extension
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 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 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Engaging our service gives you increased control over the value of your Hessle leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Jacob, started to get close to the 80-year threshold with the lease on his studio apartment in Hessle. Having bought his flat two decades ago, the lease term was of little concern. Fortunately, he noticed he needed to take action soon on a lease extension. Jacob was able to extend his lease at the eleventh hour in March. Jacob and the landlord who owned the flat above ultimately settled on sum of £5,500 . If the lease had slid to less than eighty years, the amount would have increased by a minimum £875.
Last Autumn we were called by Dr P Norbert , who completed a one bedroom flat in Hessle in October 2001. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparative flats in Hessle with an extended lease were in the region of £240,600. The average amount of ground rent was £60 collected monthly. The lease concluded on 18 April 2088. Having 62 years remaining we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 not including professional charges.
Last July we were e-mailed by Ms K Parker , who owned a first floor apartment in Hessle in October 1999. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical premises in Hessle with an extended lease were in the region of £174,200. The mid-range amount of ground rent was £55 collected every twelve months. The lease end date was in 2077. Having 51 years outstanding we estimated the premium to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of legals.