Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Highcliffe. Clearly, the term of lease remaining reduces over time. This may pass by relatively unnoticed when the residence needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Qualifying long lease owners in Highcliffe have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. Please give careful consideration before putting off your Highcliffe lease extension. Holding off that expense now only increases the price you will ultimately have to pay to extend your lease
Leasehold residencies in Highcliffe with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Highcliffe 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 conveyancer we work with provide it.
Aiden owned a high value flat in Highcliffe on the market with a lease of a little over fifty eight years unexpired. Aiden on an informal basis spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Aiden to exercise his statutory right. Aiden procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2014 we were e-mailed by Mrs Danielle Roberts who, having took over the lease of a studio apartment in Highcliffe in January 2003. We are asked if we could estimate the price would be for a 90 year lease extension. Comparative properties in Highcliffe with a long lease were worth £168,800. The mid-range ground rent payable was £60 invoiced annually. The lease concluded in 2080. Having 55 years remaining we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus costs.
In 2010 we were phoned by Dr Naomi Jackson who, having took over the lease of a first floor flat in Highcliffe in September 2007. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar premises in Highcliffe with a long lease were worth £235,200. The average amount of ground rent was £45 invoiced quarterly. The lease end date was in 2091. Given that there were 66 years remaining we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.