When it comes to long leasehold premises in Hastings, you are actually purchasing an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive notably once there are fewer than eighty years remaining. Leasehold owners in Hastings with a lease nearing 81 years unexpired should seriously consider extending it sooner rather than later. Once the lease term has under eighty years left, under the current statute the freeholder can calculate and demand a greater amount, based on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be equivalent in value to 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Hastings 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 lawyer we work with provide it.
Andrew owned a high value apartment in Hastings being sold with a lease of a few days over fifty eight years outstanding. Andrew on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 per annum. No ground rent would be due on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert advice and secured an acceptable resolution informally and readily saleable.
Last month we were called by Dr Poppy Hall , who was assigned a lease of a purpose-built apartment in Hastings in August 2003. We are asked if we could approximate the price could be for a ninety year lease extension. Comparable flats in Hastings with an extended lease were valued about £242,600. The average ground rent payable was £45 billed annually. The lease expired on 6 October 2092. Having 67 years unexpired we approximated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of legals.
In 2012 we were phoned by Mr and Mrs. E André who, having completed a one bedroom apartment in Hastings in March 2004. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Identical residencies in Hastings with a long lease were in the region of £280,000. The mid-range ground rent payable was £55 invoiced per annum. The lease ran out on 25 February 2103. Taking into account 78 years left we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including costs.