Howden 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 gets more expensive. It is the case that most Howden tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Howden you must see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Howden with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Lease extensions in Howden can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor with experience in this area.
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 in-depth market knowledge procuring Howden lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Freddie, came very close to the 80-year mark with the lease on his ground floor flat in Howden. In buying his flat twenty years ago, the unexpired term was of little relevance. Luckily, he noticed he needed to take action soon on a lease extension. Freddie was able to extend his lease just under the wire in April. Freddie and the freeholder via the management company subsequently agreed on a premium of £5,000 . If the lease had dropped below 80 years, the premium would have escalated by a minimum £1,100.
In 2012 we were e-mailed by Dr Y Gómez who, having took over the lease of a studio apartment in Howden in August 1999. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Similar residencies in Howden with a long lease were valued around £210,600. The average ground rent payable was £45 billed per annum. The lease termination date was on 28 August 2087. Given that there were 62 years remaining we estimated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 not including costs.
Last month we were e-mailed by Dr F Wright , who bought a studio apartment in Howden in October 2002. The dilemma was if we could estimate the price would be to extend the lease by ninety years. Identical properties in Howden with a long lease were in the region of £260,000. The average amount of ground rent was £50 collected annually. The lease end date was on 16 May 2098. Considering the 73 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.