The market value of Hayling Island 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 substantially once the unexpired lease term is below than 80 years
Leasehold properties in Hayling Island with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Lloyds TSB Scotland | 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. |
Engaging our service will provide you increased control over the value of your Hayling Island leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Oscar owned a conversion flat in Hayling Island being marketed with a lease of a few days over 72 years remaining. Oscar informally contacted his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Oscar to invoke his statutory right. Oscar procured expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
Last June we were called by Dr Rebecca Parker , who bought a one bedroom flat in Hayling Island in March 1999. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Comparable homes in Hayling Island with 100 year plus lease were valued around £270,000. The average ground rent payable was £55 billed yearly. The lease terminated on 16 September 2100. Considering the 75 years left we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
In 2011 we were contacted by Mrs S Martínez who, having took over the lease of a first floor flat in Hayling Island in February 2003. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by a further 90 years. Comparable flats in Hayling Island with 100 year plus lease were in the region of £173,800. The mid-range ground rent payable was £60 collected annually. The lease expired on 6 May 2080. Given that there were 55 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including professional charges.