Unfortunately that a Hilsea residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Hilsea property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Hilsea will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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. |
Using our service gives you enhanced control over the value of your Hilsea leasehold, as your property will be more valuable and marketable in relation to the lease length should you want 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.
Jude was the the leasehold owner of a high value flat in Hilsea on the market with a lease of a few days over 72 years unexpired. Jude informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Jude to invoke his statutory right. Jude obtained expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. B Parker , who took over the lease of a first floor apartment in Hilsea in November 2007. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Similar properties in Hilsea with 100 year plus lease were worth £201,200. The mid-range ground rent payable was £55 collected every twelve months. The lease concluded in 2082. Having 56 years left we estimated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of professional charges.
Last Autumn we were phoned by Dr Seth Moreau , who completed a garden flat in Hilsea in June 1996. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Similar homes in Hilsea with an extended lease were worth £300,000. The mid-range amount of ground rent was £50 billed monthly. The lease came to a finish in 2102. Given that there were 76 years unexpired we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus expenses.