For anyone whose Highcliffe home is held on a long lease, our message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you increased control over the value of your Highcliffe leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alfie owned a conversion apartment in Highcliffe on the market with a lease of a few days over 59 years remaining. Alfie on an informal basis contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Alfie to exercise his statutory right. Alfie procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Mr Finn Cooper owned a recently refurbished apartment in Highcliffe in May 1996. We are asked if we could estimate the price would likely be for a 90 year lease extension. Identical properties in Highcliffe with an extended lease were valued around £218,000. The average amount of ground rent was £45 collected monthly. The lease terminated in 2088. Having 63 years as a residual term we approximated the premium to the landlord for the lease extension to be within £17,100 and £19,800 plus costs.
Last year we were contacted by Dr C Gómez , who moved into a first floor flat in Highcliffe in September 2000. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Highcliffe with an extended lease were valued around £265,000. The mid-range amount of ground rent was £50 billed monthly. The lease lapsed in 2099. Given that there were 74 years unexpired we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus expenses.