Southport leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Southport enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Southport you should check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the same 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 in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Southport,the lease extension experts 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 Southport valuers.
Last year Austin, came perilously near to the 80-year threshold with the lease on his purpose- built flat in Southport. In buying his home 18 years previously, the lease term was of minimal interest. Thankfully, he recognised he would imminently be paying way over the odds for a lease extension. Austin arranged for a lease extension just under the wire in January. Austin and the freeholder via the management company subsequently settled on the final figure of £5,500 . If he had missed the deadline, the amount would have become more costly by at least £925.
Dr William Miller completed a purpose-built apartment in Southport in February 1997. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable properties in Southport with an extended lease were valued around £290,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease ended on 12 July 2098. Taking into account 73 years left we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.
Last year we were called by Ms T Laurent , who bought a ground floor apartment in Southport in March 2006. We are asked if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Comparable properties in Southport with a long lease were in the region of £240,600. The mid-range amount of ground rent was £65 collected per annum. The lease expired on 18 November 2087. Having 62 years remaining we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 plus legals.