It’s an underpublicised truth that a Hove residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Hove property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term dips below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Hove will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
Lender | Requirement |
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Bank of Scotland | Minimum 70 years from the date of the mortgage. |
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. |
Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
National Westminster Bank | Mortgage term plus 30 years. |
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. |
Irrespective of whether you are a tenant or a freeholder in Hove,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hove valuers.
Subsequent to protracted correspondence with the landlord of her studio apartment in Hove, Phoebe commenced the lease extension process as the eighty year deadline was quickly advancing. The lease extension completed in May 2011. The landlord’s fees were kept to an absolute minimum.
Dr Mason Gunderson owned a one bedroom apartment in Hove in March 2012. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable flats in Hove with 100 year plus lease were valued about £280,000. The mid-range amount of ground rent was £45 billed annually. The lease elapsed on 24 January 2094. Considering the 70 years left we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of legals.
In 2012 we were phoned by Dr Katherine Cooper who, having completed a basement apartment in Hove in May 1999. The dilemma was if we could estimate the premium would likely be for a ninety year lease extension. Identical flats in Hove with 100 year plus lease were worth £223,400. The average amount of ground rent was £60 collected annually. The lease finished on 24 November 2083. Given that there were 59 years as a residual term we calculated the premium to the landlord to extend the lease to be within £27,600 and £31,800 exclusive of fees.