When it comes to long leasehold property in Peacehaven, you are actually buying a right to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than eighty years remaining. Residents in Peacehaven with a lease approaching 81 years unexpired should seriously consider extending it without delay. When the lease term has below eighty years outstanding, under the current legislation the landlord is entitled to calculate and demand a greater premium, based on a technical computation, strangely termed as “marriage value” which is due.
It is generally considered that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with procure Peacehaven 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 conveyancing solicitor we work with provide it.
Last October John, started to get close to the eighty-year threshold with the lease on his basement flat in Peacehaven. Having purchased his flat 18 years ago, the unexpired term was of little concern. Thankfully, he realised he would imminently be paying an inflated amount for Extending the lease. John arranged for a lease extension just under the wire last September. John and the freeholder ultimately agreed on the final figure of £5,000 . If the lease had descended to less than 80 years, the price would have gone up by a minimum £1,150.
In 2014 we were e-mailed by Dr A Morris who, having acquired a ground floor apartment in Peacehaven in September 2011. We are asked if we could approximate the price would be for a ninety year extension to my lease. Comparative homes in Peacehaven with 100 year plus lease were valued about £189,000. The average amount of ground rent was £55 collected every twelve months. The lease terminated on 23 January 2078. Taking into account 53 years outstanding we estimated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 plus fees.
In 2010 we were called by Ms Robyn Murphy who, having acquired a one bedroom flat in Peacehaven in January 2005. The question was if we could shed any light on how much (roughly) price would likely be to prolong the lease by ninety years. Comparable flats in Peacehaven with 100 year plus lease were in the region of £290,000. The mid-range ground rent payable was £45 billed annually. The lease ran out in 2098. Having 73 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.