Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Eastney and Southsea. Clearly, the length of lease left shortens as time goes by. This may pass by relatively unnoticed when the flat or house has to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Eastney and Southsea have the legal entitlement to extend the lease for a further ninety years under Leasehold Reform legislation. Do give careful consideration before putting off your Eastney and Southsea lease extension. Putting off the cost now likely increases the price you will eventually incur to extend your lease
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Eastney and Southsea 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 conveyancer we work with provide it.
Half a year ago Luca, came very close to the eighty-year threshold with the lease on his purpose- built apartment in Eastney and Southsea. In buying his property two decades ago, the unexpired term was of no significance. Fortunately, he became aware that he needed to take steps soon on a lease extension. Luca extended the lease at the eleventh hour in March. Luca and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If the lease had fallen below eighty years, the figure would have escalated by at least £875.
In 2013 we were e-mailed by Mr and Mrs. K Reed who, having acquired a first floor apartment in Eastney and Southsea in June 2004. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by an additional years. Identical flats in Eastney and Southsea with a long lease were in the region of £248,000. The average amount of ground rent was £65 collected per annum. The lease terminated on 8 February 2089. Having 63 years as a residual term we calculated the premium to the landlord to extend the lease to be within £20,000 and £23,000 plus professional charges.
Last Autumn we were approach by Mrs Imogen Robinson , who completed a studio apartment in Eastney and Southsea in November 2012. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable homes in Eastney and Southsea with a long lease were in the region of £181,600. The mid-range amount of ground rent was £55 collected every twelve months. The lease expired on 21 June 2078. Having 52 years remaining we approximated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 not including professional charges.