Herne Bay leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Most owners of residential leasehold property in Herne Bay enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Herne Bay you would be well advised to investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you increased control over the value of your Herne Bay leasehold, as your property will be more valuable and marketable in respect of 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.
Sebastian was the the leasehold proprietor of a 2 bedroom flat in Herne Bay on the market with a lease of just over 59 years left. Sebastian on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Sebastian to invoke his statutory right. Sebastian obtained expert advice and secured an acceptable deal informally and readily saleable.
Mr Elijah Taylor moved into a garden apartment in Herne Bay in September 1998. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by an additional years. Identical premises in Herne Bay with an extended lease were valued around £290,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease concluded on 22 May 2099. Given that there were 73 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.
In 2014 we were phoned by Mrs B Peterson who, having purchased a one bedroom flat in Herne Bay in March 2004. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Comparable flats in Herne Bay with a long lease were worth £240,600. The average amount of ground rent was £60 collected per annum. The lease lapsed in 2088. Given that there were 62 years remaining we approximated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 plus fees.