It’s a harsh truth that a Bexhill residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Bexhill property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. Most flat owners in Bexhill will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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; |
| Coventry Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Bexhill lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Off the back of unsuccessful correspondence with the freeholder of her first floor apartment in Bexhill, Niamh initiated the lease extension process just as the lease was approaching the crucial 80-year threshold. The lease extension was finalised in February 2006. The freeholder’s fees were kept to an absolute minimum.
Mr Tommy Thompson completed a purpose-built apartment in Bexhill in May 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year extension to my lease. Comparable properties in Bexhill with 100 year plus lease were in the region of £246,800. The mid-range ground rent payable was £60 billed annually. The lease expired on 8 March 2074. Given that there were 50 years unexpired we estimated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 exclusive of expenses.
Mr and Mrs. R David bought a basement apartment in Bexhill in May 2010. We are asked if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Identical premises in Bexhill with 100 year plus lease were valued about £208,200. The average amount of ground rent was £65 billed quarterly. The lease ran out on 19 July 2085. Having 61 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of professional charges.