Eastbourne Lease Extension - Free Consultation

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Why you should start your Eastbourne lease extension


Main reasons to start your Eastbourne lease extension today:

A Eastbourne lease depreciates with the years remaining on the lease.

Eastbourne leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Eastbourne residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Eastbourne you should see if your lease has between 70 and ninety years left. There are compelling reasons why a Eastbourne leaseholder with a lease having around 80 years left should take action to make sure that a lease extension is put in place without delay

An extended lease is almost the same value as a freehold

Leasehold premises in Eastbourne with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.

Mortgage lenders may decide not to lend with a short lease

The definition of a short lease varies by mortgage company, yet banks and building societies start to become concerned at around 75 years. This will cause difficulties once you wish to dispose of or refinance your property as it will be effectively unmortgageable. Even though you may have no immediate intention to sell but when you do your buyer will need to hold off for 2 years before they can start the legal procedures for an extension to the lease.

Lender Requirement
Bank of Scotland Minimum 70 years from the date of the mortgage.
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.
Nationwide Building Society - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges

For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.

Lease Extensions

We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office.
Skipton Building Society 85 years from the date of completion of the mortgage

For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary

Get in touch with one of our Eastbourne lease extension solicitors or enfranchisement solicitors

Lease extensions in Eastbourne can be a difficult process. We recommend you secure guidance from a lawyer and valuer 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 dealing with Eastbourne lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Eastbourne Lease Extension Example Cases:

John, Eastbourne, East Sussex

Half a year ago John, started to get near to the 80-year mark with the lease on his studio flat in Eastbourne. In buying his home two decades ago, the length of the lease was of minimal importance. Luckily, he recognised he needed to take action soon on a lease extension. John arranged for a lease extension just in the nick of time last April. John and the landlord who owned the flat above subsequently settled on sum of £5,500 . If the lease had slipped below 80 years, the price would have gone up by at least £975.

Eastbourne case:

Dr Theo Parker was assigned a lease of a studio apartment in Eastbourne in July 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by 90 years. Comparable premises in Eastbourne with 100 year plus lease were worth £290,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease terminated in 2096. Taking into account 72 years unexpired we estimated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 plus costs.

Eastbourne case:

In 2010 we were contacted by Mrs E Thompson who, having was assigned a lease of a newly refurbished apartment in Eastbourne in March 2005. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by a further 90 years. Identical properties in Eastbourne with 100 year plus lease were in the region of £233,200. The mid-range amount of ground rent was £60 invoiced yearly. The lease elapsed in 2085. Taking into account 61 years as a residual term we calculated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of legals.