For anyone whose Eastbourne home is held on a long lease, the message is clear – if no remedial action is taken, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a landlord in Eastbourne,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Eastbourne valuers.
Subsequent to lengthy discussions with the landlord of her leasehold apartment in Eastbourne, Danielle started the lease extension process as the eighty year threshold was quickly advancing. The transaction completed in September 2008. The freeholder’s fees were negotiated to approximately four hundred GBP.
Last April we were called by Mrs F Mercier , who acquired a ground floor flat in Eastbourne in July 1996. The dilemma was if we could approximate the premium would be to extend the lease by ninety years. Identical homes in Eastbourne with 100 year plus lease were worth £218,400. The average ground rent payable was £60 collected monthly. The lease expiry date was in 2084. Considering the 59 years outstanding we calculated the premium to the landlord for the lease extension to be within £27,600 and £31,800 exclusive of expenses.
Mr and Mrs. H Ricardo bought a ground floor flat in Eastbourne in April 1999. The question was if we could estimate the premium would likely be to prolong the lease by 90 years. Comparable residencies in Eastbourne with an extended lease were valued around £205,000. The average ground rent payable was £50 collected every twelve months. The lease concluded in 2104. Taking into account 79 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £7,600 and £8,800 not including professional charges.