The value of Hastings leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is less than eighty years
Leasehold properties in Hastings with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| 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; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Hastings leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Tyler owned a high value apartment in Hastings being marketed with a lease of just over sixty years outstanding. Tyler on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Tyler to invoke his statutory right. Tyler procured expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Mrs D Miller completed a ground floor flat in Hastings in August 2011. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Comparative properties in Hastings with a long lease were worth £261,600. The average ground rent payable was £60 collected yearly. The lease concluded on 5 October 2077. Considering the 52 years remaining we approximated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 not including legals.
In 2011 we were contacted by Mr and Mrs. W Baker who, having acquired a studio apartment in Hastings in March 2007. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Similar properties in Hastings with an extended lease were valued around £218,000. The mid-range ground rent payable was £45 invoiced annually. The lease finished on 15 February 2088. Having 63 years left we calculated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 plus costs.