Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Hurworth. Clearly, the period of lease remaining reduces as time goes by. This is often overlooked and only becomes a problem when the residence needs to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Qualifying leaseholders in Hurworth have the legal entitlement to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. Please give careful deliberation before delaying your Hurworth lease extension. Holding off the cost now simply increases the price you will ultimately incur for a lease extension
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Hurworth,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hurworth valuers.
Following lengthy correspondence with the freeholder of her leasehold apartment in Hurworth, Kate started the lease extension process just as the lease was coming close to the crucial eighty-year threshold. The lease extension was finalised in March 2011. The freeholder’s costs were negotiated to approximately 650 pounds.
In 2010 we were approached by Dr Edward Hernández who, having purchased a basement flat in Hurworth in May 1996. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative flats in Hurworth with an extended lease were valued about £260,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease ran out in 2096. Given that there were 71 years left we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus legals.
Last Spring we were e-mailed by Mr and Mrs. M Roux , who completed a purpose-built apartment in Hurworth in May 2009. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by 90 years. Identical flats in Hurworth with an extended lease were valued about £254,200. The mid-range amount of ground rent was £60 collected quarterly. The lease elapsed in 2076. Taking into account 51 years unexpired we estimated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 exclusive of legals.