Unfortunately that a Pevensey residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Pevensey property prices.Once your lease nears 85ish years, you should start considering 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 slips lower than 80 years - otherwise a higher premium will be due. Most flat owners in Pevensey will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Pevensey,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 experience and the close ties they enjoy with Pevensey valuers.
In recent months Tyler, started to get close to the 80-year mark with the lease on his studio flat in Pevensey. Having bought his flat two decades ago, the lease term was of minimal bearing. Fortunately, he realised he needed to take action soon on Extending the lease. Tyler extended the lease just under the wire last August. Tyler and the landlord eventually agreed on a premium of £5,000 . If he not met the deadline, the price would have increased by at least £1,050.
Last Summer we were approach by Mr and Mrs. V Roux , who was assigned a lease of a first floor flat in Pevensey in May 2001. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative homes in Pevensey with an extended lease were worth £260,000. The average ground rent payable was £50 collected annually. The lease end date was in 2095. Considering the 71 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.
Last Winter we were called by Mr Elijah Thomas , who acquired a one bedroom flat in Pevensey in March 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by a further 90 years. Comparative flats in Pevensey with an extended lease were valued about £254,200. The average ground rent payable was £60 invoiced quarterly. The lease finished on 6 March 2075. Having 51 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 exclusive of fees.